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Alibaba's (BABA) Generative AI Efforts to Boost AIDC Segment
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Alibaba (BABA - Free Report) is constantly making efforts to strengthen its Alibaba International Digital Commerce Group (AIDC) segment, which comprises Lazada, AliExpress, Trendyol, Alibaba.com and other businesses operating in the international retail and wholesale markets.
Alibaba is currently leveraging generative AI technologies to strengthen its global marketplaces, including AliExpress and Lazada.
AIDC is using AI-powered tools to assist cross-border merchants with translation, content creation and product returns.
Year-to-Date Performance
Image Source: Zacks Investment Research
Strengthening AIDC Segment Aids Prospects
Per a Statista report, the global e-commerce market is anticipated to generate revenues of $4.12 trillion in 2024. The figure is expected to hit $6.48 trillion by 2029, witnessing a CAGR of 9.5% over 2024-2029. Strengthening the AIDC segment will enable Alibaba to capitalize on the solid growth opportunity present in the e-commerce space.
Alibaba is keeping no stone unturned to make AliExpress a success. It created synergies between AliExpress and the cross-border logistics operations of Cainiao to bolster AliExpress’ five-day and 10-day delivery services. BABA also increased investments in key markets to enhance customer experience, expand consumer base and strengthen AliExpress’ market position globally.
AliExpress also announced several promotional campaigns for shoppers after being named the exclusive global e-commerce partner of UEFA EURO 2024.
The promotional campaigns aim to enhance the user experience to drive solid customer momentum among international shoppers and sports enthusiasts for its AliExpress platform, thereby expanding its global reach.
This apart, Alibaba.com recently launched Alibaba Guaranteed for global small and medium-sized enterprises (SMEs).
Alibaba Guaranteed is a platform that simplifies B2B cross-border trade for SMEs by offering supply chain reliability. It provides secure sourcing of products at fixed prices, with guaranteed delivery within 72 hours.
The above-mentioned efforts will continue driving the AIDC segment’s performance, which is currently the key growth driver of the company.
Alibaba Suffers From Stiff Competition
Alibaba faces stiff competition in the global e-commerce market from bigwigs like Amazon (AMZN - Free Report) and eBay (EBAY - Free Report) , as well as from its domestic competitor, JD.com (JD - Free Report) .
Amazon has been at the forefront of the e-commerce market on the back of its strong Prime momentum, robust distribution strength, expanding fulfillment network and growing relationships with third-party sellers.
eBay, on the other hand, is making concerted efforts to support sellers, further solidifying its position in the e-commerce space. It recently rolled out the updated “eBay Advertising” tool that simplifies advertising, increases listing visibility and supports stronger sales velocity, aiming to help sellers grow their sales on the platform.
JD.com expanded its international express delivery service from Guangzhou and Shenzhen to nearly every district in China, boosting its popularity among SMEs. The service offers efficient logistics solutions for various products, including documents and apparel, among others, with the United States, the U.K. and Germany as top destinations.
Conclusion
Alibaba’s shares have returned 0.2% in the year-to-date period, underperforming the industry’s growth of 20.8%. BABA shares have also underperformed Amazon and eBay’s growth of 31.5% and 22.7%, respectively, in the year-to-date period. However, JD.com’s shares have lost 4.7% in the same time frame.
Unfavorable estimate revision is also noteworthy. The Zacks Consensus Estimate for BABA’s fiscal 2025 earnings is pegged at $8.20 per share, indicating a 4.9% decline from the year-ago reported figure. The figure has decreased by 0.7% in the past 60 days.
Despite the stiff competition, Alibaba’s growing generative AI efforts, strong momentum across its international commerce retail and wholesale businesses, and expanding China's wholesale commerce business are expected to continue driving its top-line growth in the days ahead.
The Zacks Consensus Estimate for 2025 total revenues stands at $138.63 billion, indicating year-over-year growth of 6.2%.
Image: Bigstock
Alibaba's (BABA) Generative AI Efforts to Boost AIDC Segment
Alibaba (BABA - Free Report) is constantly making efforts to strengthen its Alibaba International Digital Commerce Group (AIDC) segment, which comprises Lazada, AliExpress, Trendyol, Alibaba.com and other businesses operating in the international retail and wholesale markets.
Alibaba is currently leveraging generative AI technologies to strengthen its global marketplaces, including AliExpress and Lazada.
AIDC is using AI-powered tools to assist cross-border merchants with translation, content creation and product returns.
Year-to-Date Performance
Image Source: Zacks Investment Research
Strengthening AIDC Segment Aids Prospects
Per a Statista report, the global e-commerce market is anticipated to generate revenues of $4.12 trillion in 2024. The figure is expected to hit $6.48 trillion by 2029, witnessing a CAGR of 9.5% over 2024-2029. Strengthening the AIDC segment will enable Alibaba to capitalize on the solid growth opportunity present in the e-commerce space.
Alibaba is keeping no stone unturned to make AliExpress a success. It created synergies between AliExpress and the cross-border logistics operations of Cainiao to bolster AliExpress’ five-day and 10-day delivery services. BABA also increased investments in key markets to enhance customer experience, expand consumer base and strengthen AliExpress’ market position globally.
AliExpress also announced several promotional campaigns for shoppers after being named the exclusive global e-commerce partner of UEFA EURO 2024.
The promotional campaigns aim to enhance the user experience to drive solid customer momentum among international shoppers and sports enthusiasts for its AliExpress platform, thereby expanding its global reach.
This apart, Alibaba.com recently launched Alibaba Guaranteed for global small and medium-sized enterprises (SMEs).
Alibaba Guaranteed is a platform that simplifies B2B cross-border trade for SMEs by offering supply chain reliability. It provides secure sourcing of products at fixed prices, with guaranteed delivery within 72 hours.
The above-mentioned efforts will continue driving the AIDC segment’s performance, which is currently the key growth driver of the company.
Alibaba Suffers From Stiff Competition
Alibaba faces stiff competition in the global e-commerce market from bigwigs like Amazon (AMZN - Free Report) and eBay (EBAY - Free Report) , as well as from its domestic competitor, JD.com (JD - Free Report) .
Amazon has been at the forefront of the e-commerce market on the back of its strong Prime momentum, robust distribution strength, expanding fulfillment network and growing relationships with third-party sellers.
eBay, on the other hand, is making concerted efforts to support sellers, further solidifying its position in the e-commerce space. It recently rolled out the updated “eBay Advertising” tool that simplifies advertising, increases listing visibility and supports stronger sales velocity, aiming to help sellers grow their sales on the platform.
JD.com expanded its international express delivery service from Guangzhou and Shenzhen to nearly every district in China, boosting its popularity among SMEs. The service offers efficient logistics solutions for various products, including documents and apparel, among others, with the United States, the U.K. and Germany as top destinations.
Conclusion
Alibaba’s shares have returned 0.2% in the year-to-date period, underperforming the industry’s growth of 20.8%. BABA shares have also underperformed Amazon and eBay’s growth of 31.5% and 22.7%, respectively, in the year-to-date period. However, JD.com’s shares have lost 4.7% in the same time frame.
Unfavorable estimate revision is also noteworthy. The Zacks Consensus Estimate for BABA’s fiscal 2025 earnings is pegged at $8.20 per share, indicating a 4.9% decline from the year-ago reported figure. The figure has decreased by 0.7% in the past 60 days.
Despite the stiff competition, Alibaba’s growing generative AI efforts, strong momentum across its international commerce retail and wholesale businesses, and expanding China's wholesale commerce business are expected to continue driving its top-line growth in the days ahead.
The Zacks Consensus Estimate for 2025 total revenues stands at $138.63 billion, indicating year-over-year growth of 6.2%.
Alibaba currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.