Alibaba Group has been investing in a better customer experience. In doing so, its goal has been to drive sales across its international retail and B2B ecommerce sites. That strategy produced a 44% year-over-year rise to $4.02 billion in its international division’s sales for the fiscal third quarter ended Dec.31.

But those investments led to a 388% drop in earnings before taxes and amortization costs to a net EBITA loss of $433 million for the Alibaba International Digital Commerce group, Alibaba said. They also contributed to Alibaba Group’s 77% drop in Q3 net income to $1.51 billion.

Consequences of Alibaba investing in AliExpress Choice

For AIDC, the “losses increased primarily because of the increase in investment in AliExpress Choice” and other expenses, chief financial officer Toby Xu said on the earnings call.

Still, AliExpress Choice provided more products and prices to customers on the AliExpress.com international retail site because of these investments. Meanwhile, it was also a primary contributor to AIDCG’s revenue Q3 revenue gain, AIDC CEO Jian Fang said.

“AliExpresss achieved year-over-year growth of 60%,” he said. “This was mainly driven by the new AliExpress Choice model that we launched in early 2023.”

Executives added that Alibaba will continue investing in its supply chain operations to support the Choice program.

“By offering entrusted cross-border logistics, marketing and other services, we lower the barrier for merchants to engage in cross-border business, bringing more certainty to their operations and more diverse assortment to the platform,” Fang said.

Alibaba’s Visable acquisition

Fang added that in Europe, Alibaba’s B2B unit, Alibaba.com, completed its acquisition of the European B2B digital trade platform, Visable. Thanks to that deal, Fang said Alibaba is “further expanding its supplier base in the region and further advancing Alibaba.com’s global expansion and dual brand strategy.”

“There is huge potential for AIDC to increase user penetration in the majority of overseas markets, building on our current resources and footprint,” Fang said. “We will increase our investment in select regional markets where we see opportunities and value to achieve opportunities for high certainty and healthy growth.”

Alibaba’s international retail commerce sites include Lazada, AliExpress, Trendyol and Daraz.

Alibaba Group conducts its international wholesale sales through its Alibaba.com B2B ecommerce site.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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