Alibaba Group Holding Limited (BABA) saw its shares trade lower on Thursday after the company reported its fiscal first-quarter results which showed weaker-than-expected revenue and a significant decline in net income. Despite growth in its cloud and international segments, domestic challenges weighed heavily on the Chinese e-commerce giant's stock.

For the first quarter of fiscal 2024, Alibaba's revenue grew by 4% year-on-year to reach $33.47 billion, falling short of the analyst consensus estimate of $34.81 billion. However, adjusted earnings per ADS of $2.26 managed to beat expectations, surpassing the analyst consensus estimate of $2.13. Net income took a sharp dive, plunging 29% year-on-year to $3.34 billion, while adjusted net income declined by 9% to $5.6 billion.

Examining the different segments of Alibaba's business, the Taobao and Tmall Group experienced a decline in revenue of 1% year-on-year, totaling $15.60 billion. Meanwhile, the Alibaba International Digital Commerce Group showed promise with a significant growth of 32% year-on-year, generating revenue of $4.03 billion. The Local Services Group also saw an increase in revenue, growing by 12% year-on-year, driven primarily by the success of delivery platform Ele.me and mapping service Amap. Additionally, Cainiao Smart Logistics Network Limited experienced a 16% growth in revenue year-on-year, primarily due to cross-border fulfillment services. Alibaba's Cloud Intelligence Group reported a 6% growth in revenue, reaching $3.65 billion, while the Digital Media and Entertainment Group witnessed a 4% growth in revenue to $768 million, driven by the growth of its online ticketing platform for live events. All other revenue for the quarter grew by 3% to $6.47 billion.

Analyzing the performance of Alibaba's individual businesses, customer management revenue in the Taobao and Tmall Group showed a 1% increase year-on-year, primarily attributed to the growth in online gross merchandise volume (GMV). However, revenue from China's commerce retail business declined by 2% year-on-year to $14.78 billion, and direct sales and other revenue also saw a decline of 9% to $3.76 billion. On the positive side, revenue from China's commerce wholesale business grew by 16% year-on-year to $819 million. In Alibaba's International Digital Commerce Group, the international commerce retail business revenue experienced an impressive growth of 38% year-on-year, amounting to $3.26 billion, driven by increased orders from AliExpress' Choice. The international commerce wholesale business also contributed to the segment's growth, showing a 12% increase year-on-year, totaling $771 million.

The company's CEO, Eddie Wu, acknowledged the challenges faced in the domestic e-commerce market but highlighted their efforts to enhance user experience, offer quality products, and maintain market leadership. He also mentioned the positive revenue growth momentum in the cloud business, driven by public cloud and AI-related product adoption.

As a result of the disappointing fiscal Q1 results, Alibaba's shares dipped by 2.99% to $77.10 premarket.

The weaker-than-expected revenue and significant decline in net income for Alibaba's fiscal first quarter reflect the intense rivalry in the domestic e-commerce market and the impact of a weak domestic economy. However, the growth seen in the cloud and international segments is a silver lining for the Chinese e-commerce giant as it navigates through these challenges.