Connect with us

Published

on

The logo of the Alibaba office building is seen in the Huangpu District in Shanghai, June 16, 2023.

Costfoto | Nurphoto | Getty Images

Chinese tech giant Alibaba Group is betting on its overseas businesses while domestic consumption growth remains sluggish.

One bright spot in Alibaba’s latest earnings report was its international e-commerce business unit, which posted revenue of 28.5 billion Chinese yuan ($4 billion) in the December quarter, up 44% from a year ago. Alibaba International Digital Commerce Group includes platforms like AliExpress, Lazada, Daraz and Trendyol.

“The strong performance was driven by solid growth across all of AIDC’s retail platforms, especially from the crossborder AliExpress Choice business,” the company said.

Meanwhile, revenue from the company’s core e-commerce businesses Taobao and Tmall Group was $18.1 billion, growing only 2% year-over-year.

“We will step up investment to improve users’ core experiences to drive growth in Taobao and Tmall Group and strengthen market leadership in the coming year. We will also focus our resources on developing public cloud products and sustaining the strong growth momentum in international commerce business,” Eddie Wu, CEO of Alibaba Group, said earlier this month.

The tightening of the ship is likely designed to consolidate growth trajectories, de-risk uncertainties of operating in multiple, competitive markets …

Yinglan Tan

founding managing partner, Insignia Ventures Partners

Despite AIDC’s strong sales growth, losses also surged year-over-year mostly from “increased investment in businesses, including AliExpress’ Choice and Trendyol’s international business, partly offset by improvements in monetization.”

Subsidiary shakeup

The quarterly results follow a series of management shuffles at Alibaba and its subunits. Pakistan e-commerce platform Daraz replaced its CEO Bjarke Mikkelsen on Jan. 24. James Dong, CEO of Southeast Asian e-commerce giant Lazada Group, was named as Daraz’s acting CEO. The company said he would “work on a deeper integration between Daraz and our sister companies.”

In early January, Lazada executed a mass layoff across Southeast Asia, which affected employees of all levels including senior management. The cuts hit all departments including commercial, retail and marketing.

People at Alibaba International familiar with the matter told CNBC that the Lazada layoffs were intended to “streamline decision-making and boost organizational and business efficiency.”

“These latest management shake-ups have their roots in the Alibaba split last year, largely a strategy to navigate the regulatory developments in China which have long put pressure on the tech giant,” said Yinglan Tan, founding managing partner at Insignia Ventures Partners.

“AIDC’s nature as a portfolio of diverse and individually complex businesses ranging from Daraz to Lazada also plays a key factor. The tightening of the ship is likely designed to consolidate growth trajectories, de-risk uncertainties of operating in multiple, competitive markets …,” said Tan.

Leadership changes

Analyst explains why Alibaba's recent results 'don't matter that much'

In March, Alibaba had said it would split itself into six business units and pave the way for individual stock listings. Zhang told investors the move would allow Alibaba’s business “to become more agile, enhance their business decision-making, and respond faster to market changes.”

“Keeping their organisations agile and adaptable is always at the top of the agenda of Chinese tech leaders. This has been made even more urgent with the rise of competitors and changes in the external environment,” said Momentum Works in a January report titled “Understanding Alibaba’s most radical changes in history.”

Mirroring its parent company’s moves, Lazada’s leadership team has also seen its fair share of changes in recent years.

Dong took over as Lazada Group CEO from Chun Li in June 2022, after running the company’s Thailand and Vietnam operations. Prior to that, Dong was head of globalization strategy and corporate development at Alibaba Group and a one-time business assistant to former CEO Zhang.

In 2020, Li took over the role from Pierre Poignant, who succeeded Lucy Peng in December 2018, who was just nine months into the job.

Intense competition

The e-commerce business that once propelled Alibaba to success has run into challenges with upstart competitors such as PDD, while consumption growth in China remains sluggish.

China-based PDD Holdings reported third-quarter revenue nearly doubled, far outpacing Alibaba‘s 9% growth during the same period. PDD said revenue in the quarter was $9.44 billion, up 94% from $4.99 billion in the same quarter of 2022. Alibaba posted 9% year-on-year revenue growth in the third quarter to about $31 billion.

Alibaba’s Hong Kong-listed shares have plunged from an all-time high of 309.4 Hong Kong dollars ($39.59) on Oct. 28, 2020, according to LSEG data. Shares closed at HK$71.50 on Monday.

Continue Reading

Technology

How TikTok’s rise sparked a short-form video race

Published

on

By

How TikTok’s rise sparked a short-form video race

TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.

Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.

TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.

“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”

Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.

“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.

But there may a dark side to this growth.

As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.

“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”

Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.

“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”

Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.

While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.

Watch the video to understand how TikTok’s rise sparked a short form video race.

Continue Reading

Technology

Elon Musk’s xAI Holdings in talks to raise $20 billion, Bloomberg News reports

Published

on

By

Elon Musk's xAI Holdings in talks to raise  billion, Bloomberg News reports

The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)

Nurphoto | Nurphoto | Getty Images

Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.

The funding would value the company at over $120 billion, according to the report.

Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.

The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.

Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.

Faber Report: Elon Musk held call with current xAI investors, sources say

The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.

“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Read the full Bloomberg story here.

— CNBC’s Samantha Subin contributed to this report.

Continue Reading

Technology

Alphabet jumps 3% as search, advertising units show resilient growth

Published

on

By

Alphabet jumps 3% as search, advertising units show resilient growth

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.

GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”

The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.

Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.

Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.

Read more CNBC tech news

Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.

During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.

Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.

Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.

Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.

“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.

WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard

Gemini delivering well for Google, says Check Capital's Chris Ballard

CNBC’s Jennifer Elias contributed to this report.

Continue Reading

Trending