PYMNTS MonitorEdge May 2024

Alibaba: Generative AI Tools Drive 30% Increase in eCommerce Orders

Alibaba Group building

Alibaba Group is reportedly using generative artificial intelligence to strengthen its renewed efforts to expand overseas.

The Chinese eCommerce firm is using generative AI for tasks like providing translations for sellers on its platform and negotiating refunds, Zhang Kaifu, head of AI development at Alibaba’s international eCommerce unit, told The Wall Street Journal (WSJ) in an interview posted Wednesday (July 10).

Prompted by the launch of OpenAI’s ChatGPT in late 2022, Alibaba appointed Kaifu to lead a team of more than 100 engineers devoted to developing generative AI applications for the company’s overseas eCommerce business, according to the report.

During the first year of the project, Zhang focused on identifying use cases for AI. Internal tests showed that some applications — such as those helping sellers communicate in foreign languages — contributed to a 30% increase in orders for merchants, the report said.

Today, about 500,000 sellers are using Alibaba’s AI tools, per the report. Common uses include creating marketing materials, selecting merchandise, interacting with customers, negotiating refunds and returns, and handling customer disputes of bank charges, per the report.

These tools — which are built on the firm’s Tongyi Qianwen AI model — are valuable to the merchants using Alibaba’s eCommerce platforms because most are small sellers with limited staff, the report said.

The deployment of these tools comes as Alibaba has redoubled its efforts to expand overseas because it is facing slower growth and greater competition in its domestic market, according to the report.

International eCommerce remains a smaller part of Alibaba’s business but has been the company’s fastest-growing division for five quarters, per the report. During the quarter ended in March, the division saw its revenue grow 45% year over year, compared with the company’s overall growth rate of 7%.

Companies across the retail industry have been deploying generative AI to deepen customer engagement, personalize shopping and optimize supply chains, according to the PYMNTS Intelligence report “What Generative AI Has in Store for the Retail Industry.”

Kuo Zhang, president of Alibaba.com, said in June that AI has the potential to level the playing field in international commerce. Zhang said small businesses using the platform’s AI tools reported a 37% increase in product exposure.

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