Alibaba's Strong Earnings Report and Robust Double 11 Growth Highlight a New Trend of Value-Based Competition in E-commerce

Alibaba's Strong Earnings Report and Robust Double 11 Growth Highlight a New Trend of Value-Based Competition in E-commerceAlibaba Group released its second-quarter earnings report for fiscal year 2025 on the evening of November 15, showing that its core businesses maintained healthy growth momentum. During the subsequent analyst call, Wu Yongming, CEO of the Group, announced that Taobao and Tmall witnessed robust GMV growth during the recently concluded Double 11 shopping festival in 2024, and the platform also reached an all-time high in its monthly active users

Alibaba's Strong Earnings Report and Robust Double 11 Growth Highlight a New Trend of Value-Based Competition in E-commerce

Alibaba Group released its second-quarter earnings report for fiscal year 2025 on the evening of November 15, showing that its core businesses maintained healthy growth momentum. During the subsequent analyst call, Wu Yongming, CEO of the Group, announced that Taobao and Tmall witnessed robust GMV growth during the recently concluded Double 11 shopping festival in 2024, and the platform also reached an all-time high in its monthly active users. This achievement not only reflects Alibaba's commitment to a user-centric approach and its investment in fostering a thriving merchant ecosystem, but also marks a new starting point for the e-commerce industry, where value is now the primary driving force.

For several quarters, Alibaba has been implementing a "user-first" strategy, focusing on enhancing the supply of "good products, good prices, and good services," while comprehensively improving the consumer experience. The earnings report reveals a significant increase in new users on Taobao and Tmall, setting a new record for the number of buyers during Double 11. The loyal user base, characterized by 88VIP, continues to expand. As of the end of the quarter, the 88VIP membership base has reached 46 million.

This year, Alibaba has made considerable strides in interconnectivity, not only enhancing the platform's user experience and lowering operating thresholds for merchants but also helping the industry break free from the mindset of incremental competition and collaborate to explore new growth opportunities. To address certain industry pain points, Alibaba has taken measures such as relaxing the "refund only" policy, launching "Return Goods Treasure" (a new product for handling returns), and reshaping the price-band competitiveness to continuously optimize the business environment and avoid low-quality, cutthroat competition.

According to the earnings report, during this quarter, Taobao and Tmall canceled and refunded annual fees for merchants while simultaneously improving their operational efficiency through "Platform-wide Promotion." The penetration rate of merchants participating in "Platform-wide Promotion" has steadily increased. Taobao and Tmall have also introduced "Experience Scores," encouraging merchants to move away from excessive pursuit of "low prices" and instead focus on enhancing the consumer experience as a value-driven approach to achieving sustainable growth and fostering long-term business confidence.

These initiatives have shown initial success during the Double 11 period, significantly boosting merchant business growth. Official data shows that during this year's Taobao and Tmall Double 11 event, 589 brands achieved over 100 million RMB in sales, setting a new historical record. Continuous investment in 88VIP has yielded predictable growth for merchants, with 88VIP's annual partner brands achieving a 300% year-over-year increase in Double 11 sales. Taobao's "10 Billion Super Subsidy" program has emerged as a new growth engine for brands, generating over 150 million orders during Double 11, driving significant growth exceeding 100% in various sectors, including home appliances, cosmetics, and apparel. Quality-driven livestreaming has become mainstream, with 119 Taobao livestreaming rooms achieving sales exceeding 100 million RMB, setting a new all-time high.

Industry observers believe that the return of high-quality growth to the industry's mainstream reflects a shift in both supply and demand, moving away from "low quality and low prices" toward a pursuit of "value." The robust growth witnessed during this year's Taobao and Tmall Double 11 event is a positive indication of the e-commerce industry's transition from low-quality price wars to value-based competition, a shared choice by both consumers and merchants.

Liu Dian, Associate Researcher at the China Institute of Fudan University, points out that Alibaba's sustained investment in consumer experience and merchant ecosystem, despite short-term profit considerations, is instrumental in guiding the industry away from low-quality internal competition and back onto a path of healthy development. This also aligns with the e-commerce industry's pursuit of a leap forward in new-quality productivity.

"Over the past few months, amidst the intensifying market competition in the e-commerce industry, Taobao and Tmall have achieved breakthroughs in retaining core users and attracting new users," said Wu Yongming. "We will continue to invest in our core business and enhance the operating quality of our various businesses. We are also confident in our future development."

Alibaba's impressive earnings performance and the robust growth during Double 11 demonstrate the e-commerce industry's shift from low-quality price wars to value-based competition. This shift reflects not only Alibaba's own strategic transformation but also a broader industry trend. In the future, a user-centric, value-driven e-commerce model will become the mainstream, offering consumers a better shopping experience and providing merchants with more sustainable growth opportunities.

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