Alibaba makes most of its money by charging merchants on Taobao and Tmall for marketing and sales: customer management revenue was RMB343.9 billion in fiscal 2026 (the year to 31 March 2026), out of total revenue of RMB1,023.7 billion. Its second engine is Cloud Intelligence, where revenue rose 34% to RMB158.1 billion on demand for AI. The China E-commerce Group remains the profit centre, while quick commerce, the Qwen app and other units absorb heavy investment.
Merchants pay on a cost-per-click, impression, time or sales basis; Tmall sales-based fees typically range from 0.1% to 5.0% by category, and a software service fee based on completed transactions applies since September 2024.
02
Direct sales, logistics and quick commerce
Alibaba also sells goods itself and charges for logistics. Quick commerce, including Taobao Instant Commerce (the former Ele.me), earned RMB78.5 billion in fiscal 2026, net of subsidies.
03
Cloud and AI
Cloud Intelligence Group earned RMB158.1 billion in fiscal 2026 with adjusted EBITA of RMB14.3 billion, selling compute, storage and AI services built on its Qwen models.
04
International and the rest
The international group (AliExpress, Trendyol, Lazada, Alibaba.com) earned RMB144.2 billion; All others, including Freshippo, Cainiao, Amap and the Qwen consumer business, earned RMB254.4 billion and lost money.
What changed in 2025-26
A new organisation
From the quarter to 30 June 2025 Alibaba replaced its six reportable segments with a new structure: China E-commerce, International Digital Commerce, Cloud Intelligence and All others (Alibaba 20-F, 2026).
Sales and marketing expenses rose to RMB245.0 billion from RMB144.0 billion, operating income fell to RMB50.2 billion and free cash flow was negative RMB46.6 billion as purchases of property and equipment reached RMB122.0 billion.
A consumer AI app
Alibaba launched the Qwen app in November 2025, integrated with Taobao, Fliggy, Amap and Alipay. The company says consumer-facing Qwen passed 295 million monthly active users in March 2026.
Equity for AI infrastructure
In August 2026 Alibaba completed an HK$80 billion placing of new shares in Hong Kong and said it would use all net proceeds to invest in full-stack AI, including AI infrastructure (Alibaba Form 6-K, 2026).
Alibaba segments, fiscal 2026 (Form 20-F)
China E-commerce Group
RevenueRMB554.2B
Adjusted EBITARMB107.5B
Cloud Intelligence Group
RevenueRMB158.1B
Adjusted EBITARMB14.3B
International Digital Commerce
RevenueRMB144.2B
Adjusted EBITA-RMB2.1B
All others
RevenueRMB254.4B
Adjusted EBITA-RMB35.7B
What it means for you
Investors: track customer management revenue and the take rate first; they fund everything else.
Watch cloud's adjusted EBITA margin alongside its growth, because AI capacity is being bought ahead of demand.
Merchants: the cost of selling on Taobao and Tmall now includes software service fees as well as ads.
Builders: Alibaba is folding an AI assistant into commerce, maps and travel; agent-ready product data matters.
Adjust comparisons for the sale of Sun Art and Intime, which lowered reported revenue growth in fiscal 2026.
The Business Engineer lens
Alibaba is using a mature, cash-generating marketplace to finance a bet on AI cloud and a consumer AI assistant. The Business Engineer view: whoever owns the assistant that sits in front of shopping decides which merchants get traffic, which is why a marketplace now spends like an AI lab.
From merchant fees in China: customer management revenue paid by Taobao and Tmall merchants was RMB343.9 billion in fiscal 2026, out of RMB1,023.7 billion of total revenue.
How big is Alibaba Cloud?
Cloud Intelligence Group revenue was RMB158.1 billion in fiscal 2026, up 34%, with adjusted EBITA of RMB14.3 billion.
Is Alibaba profitable?
Yes. Net income was RMB102.1 billion in fiscal 2026, while income from operations fell to RMB50.2 billion as marketing spending rose.
What is Qwen?
Qwen is Alibaba's family of large language and multimodal models; the consumer Qwen app passed 295 million monthly active users in March 2026, according to the company.
The complete explainer, cleaned up and reformatted for mobile.
How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
In short
Alibaba makes most of its money by charging merchants on Taobao and Tmall for marketing and sales: customer management revenue was RMB343.9 billion in the year to 31 March 2026, out of total revenue of RMB1,023.7 billion. Its second engine is cloud computing, where revenue rose 34% to RMB158.1 billion. The China e-commerce group is still the profit centre, with adjusted EBITA of RMB107.5 billion, while other units lost money.
Watch (66 seconds): Alibaba: where the money comes from, step by step, with captions. Figures from the filing named at the end.
What drives Alibaba’s revenue
Alibaba’s China E-commerce Group reported RMB554.2 billion of revenue in fiscal 2026 (before inter-segment elimination). Its core is customer management: merchants pay on a cost-per-click, cost-per-impression, time or cost-per-sale basis. On Tmall, sales-based fees typically range from 0.1% to 5.0% by category. Customer management revenue rose 5% to RMB343.9 billion, which Alibaba attributes to a higher take rate.
Alibaba revenue by fiscal year, FY2022 to FY2026, from the company's filings. Chart: The Business Engineer.
Cloud Intelligence Group earned RMB158.1 billion, up 34%. Enterprises pay for public cloud by consumption or subscription, and Alibaba says growth came mainly from public cloud and AI-related products. The international group (AliExpress, Trendyol, Lazada, Alibaba.com) brought in RMB144.2 billion, and All others (Freshippo, Cainiao, Alibaba Health, Amap and more) RMB254.4 billion, mostly from direct sales and logistics.
How Alibaba compares
Against its own history, revenue has risen from RMB853.1 billion in fiscal 2022 to RMB1,023.7 billion in fiscal 2026. Growth slowed to 3% in fiscal 2026 from 6% the year before, though Alibaba says it would have been 11% excluding the sold Sun Art and Intime businesses.
Across segments, profit is concentrated. China E-commerce made RMB107.5 billion of adjusted EBITA and cloud RMB14.3 billion, while the international group lost RMB2.1 billion and All others lost RMB35.7 billion. Cloud’s adjusted EBITA margin was about 9%, against about 19% for China E-commerce.
Alibaba merged Taobao and Tmall, Ele.me and Fliggy into one China E-commerce Group and launched Taobao Instant Commerce in late April 2025. Quick commerce revenue grew 47% to RMB78.5 billion.
Alibaba revenue by line, prior year against FY2026, as reported. Chart: The Business Engineer.
Spending rose sharply. Sales and marketing expenses climbed 70% to RMB245.0 billion, or 24% of revenue, which Alibaba links to e-commerce user experience and Qwen app user acquisition. Operating income fell 64% to RMB50.2 billion. Net income fell a smaller 19% to RMB102.1 billion, helped by RMB87.5 billion of interest and investment income.
What to watch
Cash is now going into infrastructure. Purchases of property and equipment rose to RMB122.0 billion from RMB84.3 billion, and free cash flow was negative RMB46.6 billion, against positive RMB73.9 billion a year earlier.
Alibaba names intense competition in quick commerce, rivals’ pricing and investment, and chip export controls among its risks. The consumer-facing Qwen app passed 295 million monthly active users in March 2026, according to the company.
Frequently asked questions
How does Alibaba make most of its money?
Mainly from merchant fees in China. Customer management revenue (marketing and sales-based fees paid by Taobao and Tmall merchants) was RMB343.9 billion in fiscal 2026, out of total revenue of RMB1,023.7 billion.
How big is Alibaba Cloud?
Cloud Intelligence Group revenue was RMB158.1 billion (US$22.9 billion) in fiscal 2026, up 34%, with adjusted EBITA of RMB14.3 billion.
Is Alibaba profitable?
Yes. Net income was RMB102.1 billion (US$14.8 billion) in fiscal 2026, down 19%. Income from operations fell 64% to RMB50.2 billion as sales and marketing spending rose 70%.
What is Alibaba's quick commerce business?
It covers Taobao Instant Commerce and Ele.me, which earn platform commissions and on-demand delivery fees. Revenue rose 47% to RMB78.5 billion in fiscal 2026.
We generate most of our revenue from our core commerce segment. We also earn revenue from services associated with our cloud computing segment, digital media and entertainment segment as well as innovation initiatives and others segment. A substantial majority of our revenue is attributable to our businesses in China. See
FourWeekMBABusiness EngineerTimeline, as stated in the article
1999
1999
Launched in 1999, Alibaba.com is the leading platform for global wholesale trade with millions of buyers and suppliers worldwide.
2010
Launched in 2010, AliExpress.com is an online retail service made up of small businesses in China and elsewhere, such as Singapore, offering products to international online buyers.
Alibaba short background story
In Alibaba’s results for the quarter ended June 30, 2026, Eddie Wu is named as Chief Executive Officer of Alibaba Group.
According to Crunchbase, Alibaba started an acquisition campaign starting in 2010 that saw the acquisition of brands like:
Daraz.pk
Ejoy Technology
Damai.cn
Wandoujia
AGTech Holdings
South China Morning Post
Youku
Yueke Software
AdChina
UCWeb
AutoNavi
Kanbox
Xiami Music Network
Umeng
Vendio
Today Alibaba represents a platform that served more than four hundred million people in 2016.
Alibaba vision and mission
Alibaba’s vision is “we do not pursue size or power; we aspire to be a good company that will last for 102 years.”
As Alibaba highlighted in its 2022 financials:
For a company that was founded in 1999, lasting for 102 years means we will have spanned three centuries, an achievement that few companies can claim. Our culture, business models and systems are built to last, so that we can achieve sustainability in the long run.
How does this vision translate into Alibaba’s strategy? The company has already set its main goals. for 2024 and 2036:
Alibaba plans to serve more than a billion consumers in China alone, by 2024 and over 2 billion consumers by 2036.
Alibaba’s mission is โto make it easy to do business anywhere.โ
In short, that is about enhancing a commerce ecosystem within China and internationally.
Alibaba core values
Source: Alibaba Financials
Alibaba’s core values can be broken down into six main principles that drive the organization, and align it both internally (employees, shareholders) and externally (customers, investors):
Similarly to Amazon, the company generates revenues from nurturing a business ecosystem, which processes over a trillion dollars in transactions in 2022!
Alibaba’s business ecosystem enabled $1.3 trillion in Gross Merchandise Value (total value of merchandise sold through the platform in 2022).
Source: Alibaba Financials
Alibaba’s core technological segments can be broken down in:
Cloud: the foundational layer.
Logistics: to enable commerce.
Commerce: with its main segments to nurture the business ecosystem in and outside China.
The Cloud infrastructure is comprised of:
Alibaba Cloud: powering up a good chunk of the services built on top of Alibaba’s platform.
And DingTalk.
The logistics layer comprises all the infrastructure to serve commerce in and outside China.
And the commerce side comprises:
China Commerce.
International Commerce.
Local Consumer Services.
Digital Media and Entertainment.
Innovation Initiatives.
Alibaba monetization model
As reported in Alibaba’s annual report:
We derive revenue from our four business segments: core commerce, cloud computing, digital media and entertainment, and innovation initiatives and others. We derive most of our revenue from our core commerce segment, which accounted for 85% of our total revenue in fiscal year 2017, while cloud computing, digital media and entertainment, and innovation initiatives and others contributed 4%, 9% and 2%, respectively. We derive a substantial majority of our core commerce revenue from online marketing services. The revenue model of our
Core commerce
China’s commerce retail business primarily includes Taobao Marketplace, Tmall, Rural Taobao, and commerce technologies and services.
TaoBao Homepage UX and how it enhances social engagement through a few main features (Image Source: Alibaba Financials).
China commerce wholesale business includes 1688.com. International commerce retail business includes AliExpress and Lazada. International commerce wholesale business includes Alibaba.com.
Alibaba.com
Launched in 1999, Alibaba.com is the leading platform for global wholesale trade with millions of buyers and suppliers worldwide.
AliExpress
Launched in 2010, AliExpress.com is an online retail service made up of small businesses in China and elsewhere, such as Singapore, offering products to international online buyers.
Other platforms
Other platforms such as Taobao, 1688.com, and Lazada are part of the Alibaba network.
Cloud computing
The cloud computing segment comprises Alibaba Cloud, which offers a complete suite of cloud services.
Digital media and entertainment
It primarily includes Youku Tudou and UCWeb.
Innovation initiatives and others
It includes businesses such as YunOS, AutoNavi, DingTalk.
Cost of revenues
The principal components of our cost of revenue include:
Content acquisition costs paid to third parties for online media properties;
Logistics costs relating to fulfillment services provided to us by affiliate Cainiao Network, primarily related to Tmall Supermarket;
Traffic acquisition costs are paid to third-party marketing affiliates either at a fixed price or on a revenue-sharing basis;
Payment processing fees paid to Alipay or other financial institutions; the cost of inventory;
Expenses associated with the operation of websites, such as bandwidth and co-location fees, and depreciation and maintenance expenses for our computers, servers, call centers, and other equipment; salary, bonuses, benefits, and share-based compensation expenses;
Rebates and subsidies mainly relating to our new business initiatives;
Business taxes and related surcharges; and allowance for doubtful accounts about the microloans and VAT receivables.
Amazon has a diversified business model. In 2021 Amazon posted over $469 billion in revenues and over $33 billion in net profits. Online stores contributed to over 47% of Amazon revenues, Third-party Seller Services, Amazon AWS, Subscription Services, Advertising revenues, and Physical Stores.
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is โto be Earthโs most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.โ
In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur, of small or large organization to understand the pitfalls to avoid to run a successful company!
Amazon has a business model with many moving parts. With the e-commerce platform which generated over $222 billion in 2021, followed by third-party stores services which generated over $103 billion, Amazon AWS, which generated over $62 billion, Amazon advertising which generated over $31 billion and Amazon Prime which also generated over $31 billion, and physical stores which generated over $17 billion.
The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the companyโs product development approach on Quora. McAllister noted that the method seeks โto work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.โ
The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.
In the letter to shareholders in 2016, Jeff Bezos addressed a topic he had been thinking quite profoundly in the last decades as he led Amazon: Day 1. As Jeff Bezos put it “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
