It's been a tough past three years for most of China's stocks. Alibaba (BABA -1.46%) has been no exception. Shares of the e-commerce company soared during and because of the COVID-19 pandemic. Then Beijing's crackdown on the country's technology companies, coupled with China's long-lived coronavirus lockdowns, knocked Alibaba stock into a downtrend that seemingly remains underway.

However, now may the time to revisit this name while it's down 18% from its July peak -- and a hefty 75% below its 2020 high. A bull market might well be brewing which could lift China's currently struggling stocks with it. There are three reasons in particular Alibaba stock is primed to lead such a charge.

China's economy is perking up again

If you've kept your finger on the pulse of China's economy of late, then you likely know it's seen better days. Gross domestic product (GDP) growth rates on the order of 10% (or more) rooted in industrializing and the advent of tech are a thing of the increasingly distant past. These sorts of growth catalysts just don't exist anymore.

Nevertheless, what's relatively disappointing to China's economic ministers is still pretty darn good to the rest of the world. The International Monetary Fund is forecasting GDP growth of 4.2% for China next year, down slightly from last year's 5%, but still well above the 1.5% growth pace the Federal Reserve's governors foresee for the United States in 2024.

And China's consumers are proving particularly resilient, boding well for Alibaba's online shopping malls Taobao and Tmall. After a spending lull served up a bit of a scare mid-year, the country's retail spending started growing again in August with a 4.6% year-over-year improvement. This pace was hastened to 5.5% in September. At least part of this progress was spurred by the same month's 4.5% growth in China's industrial output, versus forecasts of only 4.3%.

Of course, broad economic growth drives demand for Alibaba's other businesses, like cloud computing services, logistics, and a digital video distribution platform.

The region's e-commerce industry is exploding

While retail spending is on the rise again in China, online shopping's growth is driving the bulk of this rebound. And yet, this sliver of the retail market still has tons of room to continue displacing brick-and-mortar stores.

Numbers from analytics outfit GlobalData tells part of the story, predicting the country's e-commerce industry will grow an incredible 9.9% this year. GlobalData's researchers then suggest China's e-commerce growth will actually accelerate in 2024, and then accelerate even more in 2025 when it reaches a pace of more than 12%.

Even then, there's room to continue growing. That's because access to broadband connections (and mobile internet in particular) in China is still proliferating. As of the middle of this year, only a little over three-fourths of China's residents regularly access the internet. That's up slightly from 2022's year-end figure, but still leaves one-fourth of the country's consumers out of Alibaba's addressable market -- for now.

In a similar vein, only around three-fourths of China's residents presently own a smartphone. As is the case with internet usage, this number is growing. There's room for a great deal more growth, though. Alibaba is clearly benefiting from this digital evolution. Its Taobao's and Tmall's e-commerce platforms collectively saw sales rise 12% year over year for the quarter ended in June despite lethargic overall retail spending in China around that time.

Alibaba stock is undervalued

Last but not least, Alibaba stock is arguably undervalued. The analyst community thinks so, anyway. Analysts' current consensus price target is just under $139 per share, versus the stock's present price of just over $83. That's an implied upside of 66%.

All analysts' calls should be taken with a grain of salt. After all, these people are only human. They can make mistakes, too. On the other hand, with the vast majority of the 40+ analysts following Alibaba saying this company is a strong buy (and none of them calling it worse than a hold), it's unlikely something troubling is being overlooked.

The fact that so many analysts are remaining this bullish on a stock, even though it's been such a poor performer of late, should offer investors some encouragement.