NEW YORK (TheStreet) -- Alibaba (BABA) is the largest e-commerce company in China but it's been steadily expanding beyond its core business of online retail and tackling all sorts of new ventures. However, it's unclear what the impact will be for investors down the line.
Earlier this month, the e-commerce giant launched an automotive unit and a "smart living" -- or Internet of Things -- division. For a while, it's been investing in entertainment and digital media, even creating its own studio to produce original films and TV shows.
It has invested in a bunch of U.S. startups, including the messaging app Snapchat, ridesharing app Lyft and mobile search provider Quixey. Then there's its huge cloud business, which it recently brought over to California. Don't forget about its health investments.
The list goes on and on, forcing investors to question how these tie back to the core business and whether or not they are cutting into investor returns. Since the start of the year, shares of Alibaba have fallen over 21% versus a 1.1% gain in the S&P 500.
Alibaba is quick to explain how all of these ventures are connected to the company's ultimate strategy.
"Our core business is still, at the end of the day, e-commerce," said Alibaba's vice president of international media, Robert Christie. But "the larger question and objective is what helps solve social problems in China. If you look at entertainment, payments, savings programs, at the end of the day they help regular Chinese people live better lives, and give them access to expand their horizons, become better educated, live a healthier lifestyle. That is what the investment strategy is."
As Wedbush analyst Gil Luria puts it, the definition of e-commerce for Alibaba, and for China, is much more broad than it is in the U.S.
"The way we think about e-commerce is much more strict," Luria said. "In the U.S. we think of it as eBay (EBAY) and Amazon (AMZN). We think of buying travel as a completely separate issue, buying media as a separate issue, buying cars and real estate as being separate than e-commerce, but that doesn't necessarily need to be the case. If you're buying it online, on your phone, it can be e-commerce as far as Alibaba is concerned. They don't need to draw the strict lines we do here."
Even if Alibaba can somehow tie all of its investments into one large umbrella strategy, the financial question remains -- all of these investments cost money but will the return be worth it?