Alibaba Group Holding saw its shares fall more than 3% on Monday after President Trump’s renewed tariff threats roiled Asian markets. The slide came after a multi-day rally, as investors scaled back risk exposure. Trading volumes on the Hong Kong Stock Exchange jumped 25% compared with the five-day average, highlighting heightened selling pressure among institutional funds concerned about broader trade tensions.

Alibaba’s cloud division is facing mounting pressure from ByteDance, which has rapidly scaled its infrastructure offerings in China’s enterprise market. According to industry estimates, ByteDance Cloud has captured roughly 12% of new enterprise contracts this quarter, compared with Alibaba Cloud’s 42%, down from 50% a year ago. Analysts note that aggressive pricing by ByteDance is forcing Alibaba to reassess its service-bundling strategies to defend market share.

Alibaba’s quick commerce arm reported a 60% year-over-year jump in revenues for the latest quarter, driven by increased order frequency and expansion into 150 new cities. However, the segment’s heavy reliance on subsidies for free delivery and rapid order fulfillment has pushed operating margins into negative territory, with losses widening to 8% of sales from 4% a year earlier. Management has warned that margin breakeven may not occur until late next fiscal year, as logistics costs remain elevated.

Alibaba management signaled plans to optimize cost structures by leveraging more third-party logistics partnerships and streamlining promotional spend. The company reiterated its target to achieve 25% annual growth in cloud revenue while narrowing the quick commerce loss ratio to below 5% by fiscal 2023. For investors, the key metrics to watch will be changes in cloud gross margins, quick commerce contribution margins, and the pace of user monetization across Alibaba’s e-commerce ecosystem.