Alibaba (9988) saw its adjusted net profit drop 67 percent year on year to 16.7 billion yuan (HK$19 billion) for the quarter ended December, missing market expectations, as hefty spending on delivery services and festive promotions failed to drive a significant increase in demand.
China's largest e-commerce company's net profit also fell 67 percent to 16.3 billion yuan. Total revenue inched up 1.7 percent to 284.8 billion yuan.
Alibaba China E-commerce Group generated 159.3 billion yuan, up 6 percent, of which the quick commerce business jumped 56 percent to 20.8 billion yuan, mainly due to order growth as a result of the rollout of "Taobao Instant Commerce."
Revenue of Alibaba International Digital Commerce Group rose 4 percent to 39.2 billion yuan.
Its Cloud Intelligence Group posted income of 43.3 billion yuan, rising 36 percent from a year ago, primarily driven by public cloud revenue growth, including the increasing adoption of artificial intelligence-related products.
Its share of profit from Ant Group slid 91.3 percent to 393 million yuan, dragged down by the decrease in fair value of certain investments and investments in new growth initiatives, including user growth and technologies.
Alibaba maintained strong investments across our core pillars of AI and consumption, with AI continuing to be one of its primary growth engines, said chief executive Eddie Wu Yongming.
Its US-listed shares dropped nearly 5 percent in premarket trading.
