Beijing, July 11, 2025 — Chinese tech conglomerate Alibaba is facing significant financial strain, with its market value plummeting by over $100 billion. According to a recent report by Goldman Sachs, the company is projected to incur a loss of 41 billion yuan (approximately $5.7 billion) in its food delivery unit, Ele.me, for the 12 months ending June 2025.
The report attributes the substantial loss to intensifying competition in China’s food delivery market, where Alibaba has been aggressively trying to capture market share from dominant rival Meituan. Analysts say that despite strong demand in the sector, the high operational costs and heavy discounting employed by Ele.me are severely impacting profitability.
Goldman Sachs’ projections have heightened investor concerns over Alibaba’s strategy to expand in low-margin sectors. The company, once a pioneer in China’s e-commerce revolution, is now grappling with growing losses in emerging business units, especially those outside its traditional strengths.
China’s food delivery market, valued at over $150 billion and expected to grow further, has become a battlefield for tech giants. Meituan, which currently commands over 70% of the market, continues to strengthen its dominance through robust logistics and AI-based optimization. In contrast, Alibaba’s Ele.me has struggled to scale operations efficiently, leading to continued cash burn.
The ongoing price wars between platforms and thin profit margins are also contributing to the financial challenges. “Despite the growth of the food delivery market, achieving sustainable profitability remains a major hurdle,” the Goldman Sachs report noted.
The projected 41 billion yuan loss in Ele.me has broader implications for Alibaba’s financial health. The company has been undergoing internal restructuring, breaking up into six independently run business units to improve agility and focus. However, mounting losses in the local services segment—under which Ele.me operates—could force a strategic rethink.
Additionally, the economic slowdown in China and increased regulatory oversight have added further pressure on the company’s operations and market performance. Industry experts suggest that Alibaba may need to shift its focus back to core profitable segments or seek partnerships to mitigate growing losses.
Alibaba has not issued an official statement in response to the Goldman Sachs report. However, market analysts believe the company’s leadership will face tough questions from shareholders in the upcoming quarterly earnings call.
