Core Viewpoint - Alibaba's significant investment in food delivery subsidies has led to a surge in orders but a substantial decline in profits, highlighting the intense competition in the food delivery market [2][3]. Financial Performance - For the quarter ending June 2025, Alibaba reported total revenue of approximately 2476.52 billion RMB, a year-on-year increase of 2%. Excluding disposed businesses, the revenue growth would be 10% [3]. - The profit for Alibaba's China e-commerce group shrank over 100 billion RMB to 383.89 billion RMB, a decline of about 21% compared to 487.53 billion RMB in the same period last year [3][13]. - The sales and marketing expenses for the quarter were approximately 531.78 billion RMB, an increase of 204.82 billion RMB or 62.64% year-on-year [7]. Investment in Food Delivery - Alibaba announced a plan to invest 500 billion RMB in food delivery subsidies over the next 12 months, raising concerns about further profit declines [3][11]. - The major areas of expenditure include direct consumer subsidies, logistics infrastructure, merchant incentives, and technology investments [8]. Order Growth and Market Position - Following the launch of the "Taobao Flash Sale" service, the monthly active users of Taobao Flash Sale and Ele.me riders increased by 181%, with part-time riders growing by 236% [8]. - Daily orders for Taobao Flash Sale exceeded 60 million, and during promotional events, daily orders reached over 100 million, marking a significant milestone in the competitive landscape [8][9]. Profitability Challenges - Despite the increase in order volume, the profitability issue remains a significant challenge for Alibaba, with an average loss of 4.4 RMB per order during the initial months of Taobao Flash Sale [15]. - Alibaba's free cash flow showed a net outflow of 188.15 billion RMB, compared to a net inflow of 173.72 billion RMB in the previous year, primarily due to investments in Taobao Flash Sale [16]. Strategic Outlook - Alibaba's e-commerce group CEO, Jiang Fan, outlined a plan to improve operational efficiency and reduce losses through user optimization, increasing high-value orders, and lowering logistics costs [17]. - The company anticipates that the integration of offline brand stores into Taobao Flash Sale will generate significant new business opportunities, projecting an additional 1 trillion RMB in transactions over the next three years [18].