Alibaba Group said revenue climbed 9 percent to RMB 224.79 billion (USD 30.81 billion) in the second quarter, as the Chinese e-commerce giant reneges on plans to spin-off its cloud unit.
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The Hangzhou-based company said it has changed its mind regarding a potential spin-off of its Cloud Intelligence Group, citing the recent expansion of U.S. restrictions on the export of advanced computing chips to China, creating “uncertainties” for the prospects of its cloud units in respect to the value of the move for shareholders.
“Accordingly, we have decided to not proceed with a full spin-off, and instead we will focus on developing a sustainable growth model for Cloud Intelligence Group under the fluid circumstances,” Alibaba said in a press release, without providing specific details.
For the three months ending September 30, Alibaba said its Alibaba International Digital Commerce Group, which operates Lazada, AliExpress, Trendyol, Daraz, Miravia and Alibaba.com, increased by 53 percent, on the back of double-digit growth at Southeast Asia-focused marketplace Lazada.
Revenue from Alibaba’s Local Services Group grew 16 percent, driven by strong growth in both Ele.me and Amap businesses, while revenue from Cainiao grew 25 percent, primarily driven by revenue from cross-border fulfillment solutions.
Revenue from its Cloud Intelligence Group inched forward 2 percent. Finally, the group’s Taobao and Tmall revenues grew 4 percent.
“Alibaba Group delivered a solid quarter, marked by renewed momentum and energy across multiple businesses as a result of our strategic reorganization,” said Eddie Wu, chief executive officer of Alibaba Group.
“As we embark on a new phase of development, we have clearly defined our strategic focus and priorities. We will maintain an entrepreneurial mindset. We are committed to investing for growth and making bold decisions where necessary. Through a more flexible organisational governance mechanism, we aim to capture brand new opportunities from the ongoing AI technological transformation and create more value for our customers.”