Alibaba Group reported weaker-than-expected earnings for the latest quarter, despite efforts to revive growth in a challenging environment. Net profit for the three months ending in June fell 29% year-over-year to 24.27 billion yuan ($3.40 billion), missing the 28.175 billion yuan expected by analysts. The decline was attributed to increased marketing, product development, administrative costs, and higher taxes.

Revenue grew by 3.9% to 243.24 billion yuan, also falling short of analysts’ expectations of 246.36 billion yuan. This growth slowed from the previous quarter’s 6.6% increase, reflecting the impact of fierce domestic competition, a cooling Chinese economy, and shifting consumer behaviors.

Alibaba’s core domestic e-commerce segment, Taobao and Tmall Group, saw a 0.9% decline in sales to 113.37 billion yuan. Despite this, the company achieved high-single-digit growth in online gross merchandise value, driven by increased customer numbers and purchase frequency.

The cloud-computing division reported a 5.9% increase in revenue to 26.55 billion yuan, while the overseas e-commerce unit posted a 32% rise to 29.29 billion yuan, though this was slower than the 45% growth in the previous quarter.

CEO Eddie Wu emphasized the company’s focus on enhancing user experience and returning its domestic e-commerce business to a growth trajectory. However, the challenges posed by a slowing economy and rising competition from platforms like Pinduoduo and Douyin continue to weigh on Alibaba’s performance. Adjusted net profit, which excludes certain expenses, fell 9.4% to 40.69 billion yuan, slightly exceeding analyst expectations.