Alibaba Group reported mixed results for its third quarter ended December 31, 2025, with revenue of 284.8 billion yuan (€35.8 billion), up 2% year on year. Net profit fell 66% to €1.9 billion, pressured by heavy investment in quick commerce and technology infrastructure. The group is increasingly relying on new growth drivers as weaker consumer spending in China limits momentum in its core domestic commerce operations.
Cloud Intelligence has become Alibaba’s main growth engine, with revenue up 36% to €5.4 billion. The company said this momentum is being driven by accelerating demand for Artificial Intelligence-related products, marking its tenth consecutive quarter of double-digit growth in that area. Alibaba International Digital Commerce also improved, increasing revenue by 4% to €4.9 billion while significantly reducing operating losses. The group has also worked to optimise AliExpress through its Brand+ programme and deepen logistics links with Lazada and South Korea’s Shinsegae.
In China, Alibaba has rebranded Ele.me as Taobao Instant Commerce to tie delivery services more closely to its core marketplace. Customer Management revenue rose 1%, reflecting softer domestic consumption, although the Taobao app continued to deliver double-digit growth in monthly active users. The premium segment remained relatively resilient, with 59 million 88VIP members, supporting Alibaba’s focus on retaining higher-value customers amid intense price competition.
Generative Artificial Intelligence is now central to Alibaba’s operating strategy. The Qwen app, which has surpassed 300 million monthly active users, has expanded from a chatbot into a tool that can complete transactional tasks. Linked with Taobao, Tmall and Alipay, it is designed to turn search into assisted purchasing. Around 140 million users made their first transaction via this intelligent agent in February, spanning categories from groceries to travel bookings on Fliggy.
The push is weighing on profitability in the short term. Adjusted EBITDA fell 57% to 23.4 billion yuan, but Alibaba is treating the spending as a strategic investment to build barriers against rivals. The company is seeking to control the full technology stack, from GPU chips for Artificial Intelligence to consumer applications, while preserving its ability to compete with US players. It ended the third quarter with €70.5 billion in liquid assets. Over the first three quarters, revenue rose by 2.7% to €95.6 billion. Full-year results for the quarter ending in March are due in June.
