The news: Alibaba and JD.com delivered mixed Q1 2026 results as investments in food delivery and quick commerce weighed heavily on profits.

The numbers:

• Alibaba’s China ecommerce business, which includes Taobao and Tmall, grew revenues 6% YoY, although adjusted EBITA fell by 40%.
• JD’s food delivery and overseas expansion helped offset tepid growth for its core domestic retail business, with revenues growing 4.9% YoY. Net income plunged 53%, better than the 65% drop forecast by analysts.

Implications for Alibaba, JD, and China’s retail industry: The steep drop in profitability points to the extreme measures retailers are being forced to deploy to unlock spending from Chinese consumers.

Much like Amazon, Alibaba is betting that delivery speed and AI features will drive sales and increase dependence on its ecosystem. That bet is paying off to a certain extent: Quick commerce revenues jumped 57% YoY, helping offset a 1% decline in Alibaba’s D2C ecommerce business. AI-related product revenues grew by triple-digit percentages for the 11th straight quarter, pointing to healthy enterprise appetite for AI tools. However, investments in both areas sharply reduced the company’s profits in Q1 and are likely to continue pressuring margins as Alibaba doggedly pursues expansion.

Much of Alibaba’s spending is being spurred by the need to fend off JD, which has poured billions into growing its food delivery business despite warnings and fines from Beijing. With JD setting an ambitious target of controlling 30% of the food delivery market by year-end—up from 15% as of February—both companies face another year of fierce competition and depressed profits.

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