Alibaba Boosts E-Commerce Edge with AI, Despite Shrinking Market Share

Alibaba Boosts E-Commerce Edge with AI, Despite Shrinking Market Share

Alibaba Group Holding Ltd (NYSE:BABA), confronted by a fierce e-commerce market in China, is leveraging artificial intelligence to enhance its competitiveness.

On Alibaba’s Taobao platform, shoppers can utilize Wenwen, an AI chatbot, for personalized product recommendations, such as a Sony Group Corp (NYSE:SONY) camera priced at approximately $650, tailored to the user’s specifications, the Nikkei Asia reports.

Introduced in 2023, Wenwen is powered by Tongyi Qianwen, or Qwen, a large language model developed by Alibaba’s cloud division.

Also Read: Alibaba Stock Dips as Huge Investment Losses In Q4 Overshadow Revenue Growth and Dividend

In addition to aiding shoppers, Alibaba employs generative AI to streamline merchant operations, simplifying tasks like photo editing and virtual model creation.

Despite these innovations, Alibaba reported a net profit increase of 10% to 79.7 billion yuan ($11 billion) for the fiscal year ending March, with revenue growing 8% to 941.1 billion yuan.

Although Alibaba’s Taobao and Tmall platforms have seen their market share drop from 80% in 2017 to 37% in 2023, CEO Eddie Wu reported double-digit growth in gross merchandise value for these segments in the first quarter of the year.

Analysts flagged Alibaba’s double-digit year-on-year growth in GMV thanks to discounts. They expect cloud business to record double-digit growth in the back half of fiscal 2025.

BABA stock has lost over 4% in the last 12 months. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF (NASDAQ:PGJ) and ProShares Online Retail ETF (NYSE:ONLN).

Price Action: BABA shares traded higher by 1.18% at $87.72 premarket at the last check on Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Alibaba Photo Via Shutterstock


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Alibaba, navigating sea change, reorients business towards bread-and-butter e-commerce and AI, pares down overhaul

By March 2023, Alibaba had lost three quarters of its value from the peak in October 2020, as the e-commerce giant, once seen as China’s answer to, faces questions on whether it can recapture its former glory while dealing with China’s economic slowdown, regulatory scrutiny and fierce competition from old and new rivals.

The Alibaba headquarters in Hangzhou, Zhejiang province. Photo: AFP
It was against this backdrop that Alibaba, owner of the South China Morning Post, announced in that same month an overhaul plan to break itself into six independently run entities on top of other smaller units.
Less than three months later, Alibaba announced that Joe Tsai, one of two “permanent partners”, will return to take the helm of the group as chairman, with Eddie Wu Yongming, one of the earlier lieutenants of Ma, assuming the role of CEO. Zhang left the company last September, and his original plan of launching separate IPOs for the Cloud Intelligence Group and Cainiao Smart Logistics Network were eventually cancelled.

Ma, who no longer holds any management role but has become Alibaba’s largest shareholder after early investor SoftBank cashed out its stake, wrote a rare long memo to Alibaba employees this week, endorsing the changes made by Tsai and Wu and urging employees to embrace innovation.

“We made countless mistakes in the past 25 years, and we will [continue to] make mistakes in the next 77 years”, wrote Ma. “To face problems is not to deny the past, but to responsibly find the way to the future.”

In a podcast interview with Norges Bank Investment Management’s CEO Nicolai Tangen last week, Tsai also said the group has made “mistakes”.

“We have fallen behind because we forgot who our real customers are,” Tsai said. “Our customers are the users who use our

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Alibaba in no ‘hurry’ to pursue IPOs, promises to ‘reignite’ e-commerce unit

China’s Alibaba is pledging to inject new energy into its e-commerce division as it attempts to keep off new e-commerce entrants like Temu-proprietor PDD Holdings and TikTok-operator ByteDance. On Wednesday, Alibaba documented underwhelming results for the previous quarter of 2023, sending its U.S.-detailed shares down by 5.9% inspite of a $25 billion share buyback system.

Revenue at Alibaba’s Taobao and Tmall Group (TTG), the company’s main e-commerce team, grew just 2% yr-on-year for the last quarter of 2023, achieving 29.07 billion yuan ($17.98 billion). Alibaba’s all round quarterly profits rose by 5% to achieve 260.35 billion yuan ($36.61 billion), under analyst estimates.

“Our top rated precedence is to reignite the development of our two main companies: e-commerce and cloud computing,” Alibaba CEO Eddie Wu informed analysts.

Wu contineud that Alibaba needed to make qualified investments in “price competitiveness, company and user practical experience,” in a statement printed Wednesday. The business will enhance the assortment of branded and direct-from-company goods on the TTG platform and emphasis on offering “attractive selling prices for quality products.”

Alibaba is grappling with a rough sector. Chinese shoppers are growing more careful about paying out amid macroeconomic headwinds, turning to much less expensive products and services.

But the organization is also contending with amplified competitors from players like PDD Holdings, proprietor of Pinduoduo and Temu, and ByteDance, father or mother firm of TikTok and its Chinese equivalent Douyin.

PDD Holdings documented 94% year-on-year progress for the quarter ending Sep. 30, 2023. By comparison, Alibaba described 9% advancement in that exact quarter. (PDD has however to report benefits for the last quarter of 2023).

In China, Pinduoduo has developed as a group-acquiring platform that will allow buyers to make team orders in bulk to lessen costs.

ByteDance is also encroaching on Alibaba’s turf, particularly by expanding

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As Temu shakes up global e-commerce, PDD nears overtaking Alibaba

PDD, the business guiding the quickly-escalating browsing application Temu, is shaking up China’s Significant Tech club.

On Thursday, information of Alibaba’s market cap sliding beneath that of PDD created headlines all over the Chinese world-wide-web. This development marked a historic change in China’s e-commerce space, where for many years Alibaba experienced held the crown jewel. Now the 24-12 months-outdated incumbent is going through its greatest problems while eight-12 months-old PDD catches up with an amazing ascent.

PDD, which saw its current market price surge over $188 billion soon after reporting a doubling in profits year-more than-year, is not even trading at its all-time higher, which was recorded in early 2021. The second is a reminder of Alibaba’s gradual descent from its heights in recent moments.

Alibaba’s troubles began in late 2020 right after its founder Jack Ma publicly criticized Chinese laws, sending shockwaves by means of the country’s tech business. His remarks ended up broadly seen as the catalyst for the suspension of the original general public providing of Ant Group, the fintech large he made. In the two decades that followed, Beijing kicked off a series of crackdowns on the world-wide-web sector in an work to rein in powerful players like Alibaba.

As Ma retreated from public perspective, Alibaba experienced been working on splitting into six unbiased entities, but areas of the approach were abruptly deserted. In September, the organization said it made the decision to discontinue the spin-off of its cloud computing device, citing “uncertainties” brought on by U.S. export controls of innovative computing chips to China. It also place the prepared IPO of its grocery operation Freshippo on hold. The series of information wiped billions of pounds off Alibaba’s current market price.

In the meantime, PDD has been forging ahead thanks to advancement at house and overseas.

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Alibaba espionage investigation puts focus on Chinese app gains

Beijing’s aggressive industrial plan aims are back again in target as Belgium contends with alleged espionage activities arising from a logistic arm of Alibaba at an airport in Liège, Europe’s fifth-greatest cargo airport hub.

Belgium Protection companies are investigating “possible espionage and/or interference activities” carried out by Chinese entities such as Alibaba, in accordance to the Economic Situations.

The focus of the investigation is an Alibaba logistics spin-off known as Cainiao that handles merchandise marketed to European clients through the e-commerce internet site Aliexpress. The Belgium Condition Protection Assistance reportedly has been checking Alibaba’s functions for two yrs thanks to a Chinese regulation requiring corporations to share their information with Chinese authorities and intelligence.

This regulation permits the govt to ask for things transiting via the hub to be cataloged or modified, states Carlos Perez, research practice lead at TrustedSec, a cybersecurity firm. These modified goods could be leveraged in the long run for cyber warfare.

What is economic espionage?

Any focusing on or acquisition of secret information and facts involving trade, technological innovation, or monetary aspects is considered financial espionage.

A enterprise like Alibaba could be applying its equipment in an airport hub to obtain proprietary knowledge involving transactions involving companies and countries paying for products, in accordance to John Vecchi, the main advertising and marketing officer at Phosphorus Cybersecurity.

Cainiao, Alibaba’s logistic warehouse
Photograph: Aly Track (Reuters)

“The Chinese are looking at a command and control that sucks all the information out,” Vecchi explained. “They would be able to see who the businesses are, their personnel, and the men and women producing the buys, and they may well be able to exploit the firms included in those transactions.”


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