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Alibaba Is Winning The War—But Consumers Are Losing The Discounts!

Alibaba’s latest rally was not driven by a sudden rebound in consumer demand or an overnight turnaround in profits. It was driven by something far more specific: the market began to price in the possibility that China’s bruising food-delivery and instant retail price war may finally ease. That matters because the discount-heavy battle among Alibaba, JD.com, and Meituan had been pushing prices lower for consumers while putting visible pressure on margins, profit, and cash flow. Alibaba’s own December-quarter numbers showed the strain. Revenue rose, but net income fell sharply, free cash flow dropped, and management made clear that it was still investing heavily in quick commerce to gain share. At the same time, the latest earnings call also revealed why investors still bought the stock: quick commerce is scaling quickly, user metrics are improving, and management believes this business can eventually become profitable.