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Alibaba Says Generative AI Tools Drive Increase in eCommerce Orders

Alibaba Group, a Chinese business giant, is currently using generative artificial intelligence technology to step up its efforts to scale operations globally.

Alibaba Says Generative AI Tools Drive Increase in eCommerce Orders

Zhang Kaifu, head of AI development at Alibaba’s international eCommerce unit, said during a conversation with media representatives that the company applies digital intelligence to solve tasks such as providing translations for sellers on its platform and negotiating refunds.

It is worth noting that Chinese companies mostly react promptly to any evolutionary or progressive changes in the technological environment. The active development of artificial intelligence has also become a kind of signal for firms from an Asian country to move. For example, Chinese companies have paid practical attention to the debut of the chatbot ChatGPT from OpenAI in 2022. After the popularity and impressive cognitive abilities of the mentioned digital product became what can be described as an obvious fact, Alibaba management appointed Zhang Kaifu as the head of the team consisting of more than 100 engineers specializing in the development of apps using artificial intelligence. In this case, it means apps designed for the foreign e-commerce business of the company.

Initially, a team of specialists led by Zhang Kaifu focused on identifying possible scenarios for artificial intelligence. During internal tests, it turned out that some AI apps developed by Alibaba engineers contributed to an increase in the number of orders for merchants by 30%. It is worth noting that the corresponding digital products help sellers communicate in foreign languages.

Currently, about 500,000 merchants use the artificial intelligence tools offered by Alibaba. The application of advanced technology helps them to create marketing materials, select merchandise, interact with customers, discuss issues related to bank charges with clients, and negotiate refunds.

The mentioned tools are based on the machine intelligence model developed by the company called Tongyi Qianwen. These functional solutions are especially valuable for sellers using e-commerce platforms that are part of the Alibaba digital ecosystem. A significant value in this case is because most of the mentioned merchants are representatives of small businesses and have limited staff.

Recently, Alibaba has been intensifying the process of implementing efforts aimed at scaling up its activities at the global level. Artificial intelligence tools are a kind of accelerator for the materialization of the specified plan. In the Chinese market, the business giant has recently been faced with circumstances such as increased competition and slowing growth.

So far, international e-commerce is a smaller segment of Alibaba’s activity. At the same time, over the past five quarters, this area of the company’s business has demonstrated the highest level of growth intensity. In the quarter ended in March, the revenue of Alibaba’s international e-commerce unit increased by 45% year-on-year. At the same time, the overall growth rate of the company’s business over the mentioned period was fixed at 7%.

It is worth noting that currently in the retail area, there is a tendency for the introduction of generative artificial intelligence by many companies. In this case, advanced technology is used to deepen customer engagement. Also in the retail area, generative artificial intelligence is a tool for personalizing purchases and optimizing supply chains.

Kuo Zhang, president of Alibaba.com in June, stated that machine intelligence has the potential to level the playing field in the international trade space. He also noted that representatives of small businesses using the tools of the artificial intelligence platform recorded a 37% increase in product exposure.

Kuo Zhang stated that the mentioned tools were applied by sellers from 20 countries, half of which belong to the category of developing states. This tendency is evidence that the democratization of advanced technologies in the future will allow businesses to overcome the digital divide in global trade.

It is worth noting that the use of generative artificial intelligence in the e-commerce area has significant potential, which has not yet been fully realized. In the context of the prospects for integrating AI into the mentioned functional space, one of the most likely and already gradually materializing scenarios of a kind of future in the form of a new technological reality is the transformation of the customer experience. Machine intelligence has begun to bring fundamental innovations to the specified experience. It is worth noting that other advanced technologies are also contributing to the approaching future of a new functional form. For example, augmented reality generates a new format of user interaction with the virtual trading space. In a sense, buyers can combine digital prototypes of the products they are interested in with the actual world using augmented reality technologies.

There is also gradually being formed the practice of applying machine learning algorithms to identify products that are most likely to be in demand among consumers. In this case, arrays of information about sales figures in previous periods are used. Appropriate practice is the first step toward automating inventory management. One of the predictive analytics tools is Google’s Cloud Machine Learning Engine (MLE). The current level of development of artificial intelligence already allows it to be a full-fledged and effective tool for inventory management in real-time.

AI can also be an effective tool in the context of interaction with the Internet of Things, which is a system of interconnected devices that share data. Artificial intelligence can use the mentioned arrays of information to provide consumers with personalized shopping offers. For example, a smart refrigerator can independently detect when products are running out and automatically add the necessary goods to an online shopping cart. The appropriate integration format creates a seamless shopping experience tailored to individual needs.

The Internet of Things can also help the seller to improve control over the logistics process. In this case, it implies the ability to track goods throughout the entire supply chain. With cloud technologies such as GPS and RFID, it is possible to access data such as traffic conditions, weather, location, and personnel IDs. This information can help to optimize shipping and order fulfillment.

The process of integrating generative artificial intelligence into the e-commerce space will continue, and this is an almost guaranteed scenario, the implementation of which can only be canceled by unforeseen circumstances of significant impact and global scale. It is possible that in the future the development of AI will reach such a level that advanced technology will become an independent seller. At the same time, it is the probability of a long-term perspective, the realism of which is currently a question without a definite answer. The materialization of the corresponding scenario depends on the limits of the development of artificial intelligence, which are still unknown for certain.

As we have reported earlier, Alibaba Plans to Invest $1.1 Billion in South Korea.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.