* Alibaba's (BABA) revenue, net income miss analysts' estimates
* Cloud revenue grows 36%, AI business to separate from
cloud arm
* Alibaba's (BABA) shares drop nearly 4% in premarket trading
* Singles' Day promotions fail to boost consumer
enthusiasm
(Adds cloud revenue, AI initiatives, executive's comment;
paragraphs 3-6,7)
By Akash Sriram and Casey Hall
March 19 (Reuters) - Alibaba (BABA) reported
on Thursday a 1.7% rise in third-quarter revenue, while net
income fell 66.3%, both missing analysts' estimates, as heavy
spending on one-hour delivery and promotions during peak
shopping periods failed to spur demand.
U.S.-listed shares of Alibaba,China's largest e-commerce
company, fell nearly 4% in premarket trading after it booked
revenue of 284.84 billion yuan ($41.28 billion) for the three
months through December, versus LSEG estimates of a 3.7% rise.
Cloud revenue outpaced expectations with growth of 36%,
during which Alibaba (BABA) rolled out numerous AI agent integrations
for the consumer-facing side of its business, and scaled
investments.
This week, the firm said it would separate its AI businesses
from ?its cloud computing arm.
The newly formed Alibaba Token Hub business group, led by Chief
Executive Eddie Wu, is the company's clearest sign yet that it
is shifting its focus to digital assistants powered by AI models
that consume far more tokens, or data units models use to
generate language, than traditional Q&A chatbots.
"We are well-positioned to drive growth on both enterprise AI
and consumer AI fronts, powered by our full-stack AI
capabilities," Wu said in a statement accompanying the earnings
release.
Such capabilities span foundation models, cloud infrastructure,
and proprietary chips, alongside deep integration with the
company's broader ecosystem, Wu added.
A prolonged property crisis, coupled with concerns about income
stability, continued to weigh on consumer sentiment, limiting
spending even during traditional periods of high expenditure.
Singles' Day sales in November extended to more than a month
of promotions but drew muted response.
Retailers ramped up discounts and subsidies to encourage
spending, but cautious consumers and year-round deals diluted
the event's traditional sales surge.
Retailers, such as Alibaba (BABA) and JD.com (JD), stepped up
competition during the quarter, spending heavily on discounts
and faster delivery to capture market share from food-delivery
leader Meituan (MPNGF), pressuring profit margins.
Alibaba (BABA) has said its focus in upcoming quarters will be to
improve unit economics for its Taobao Quick Commerce division.
($1=6.9003 Chinese yuan renminbi)
(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini
Ganguli and Clarence Fernandez)
Print
