Alibaba empowers small merchants with AI to compete in global marketplace

The narrative of generative AI is that it can replace humans at work, and it has. So it’s refreshing to hear a senior executive from one of the world’s largest e-commerce companies talk about how its generative AI tools are helping small businesses succeed in the global marketplace.

In a speech at the Reuters Next APAC conference in Singapore, Kaifu Zhang, vice president of Alibaba’s International Digital Commerce Group (AIDC) and head of its artificial intelligence (AI) initiative, discussed how the company is developing generative AI tools to help its one million merchants connect with a global customer base of 300 million active consumers per year.

photo: Kaifu Zhang, Vice President of Alibaba International Digital Commerce Group at Reuters Next APAC Summit *Reuters/Ore Huiying*

According to Zhang, AIDC has developed an e-commerce infrastructure with AI tools that will enable all merchants to sell their products anywhere in the world.

This includes micro-businesses, which Zhang also called “mommy shops.” Using Alibaba’s AI tools, these small merchants can compete on a level playing field with larger businesses in the international e-commerce market.

Empowering Micro-Enterprises with AI Tools

Speaking about Alibaba’s AI technology, Zhang revealed that Alibaba started building its AI tools last year and there are currently 40 e-commerce applications for generative AI, including applications for project generation, marketing, and consumer insights.

With these AI tools, Alibaba has lowered the cost barrier for its sellers, enabling micro-businesses to create marketing materials and content themselves and sell, market, and communicate cross-border in different languages.

Zhang also mentioned that AI tools enable country-specific language localization, as words and terms may have different meanings in countries that use the same language.

Responsive AI chatbot for 24/7 customer service

Zhang emphasized that one of the most challenging applications of AI is product returns, which are “a pain point, a lose-lose situation” — they typically involve additional shipping, storage and replacement costs.

With a multimodal AI-powered customer service chatbot, a retailer gains an online agent capable of “reasoning, making decisions, automating processes, and generating content” that is always on, communicates in multiple languages, and can solve problems on its own.

As an example, Zhang shared how an AI customer service agent would handle the return of a dress that was the wrong color — the AI asked the customer for a photo of the product, recognized the specific issue, and offered a cost-effective solution, such as “We’ll refund you 40% if you agree to keep the dress.”

Zhang also remained optimistic about the potential of AI for the company, even amid rising tensions between China and the U.S. “China is practically on par with the U.S. in terms of the pace of (AI) innovation,” said Zhang, who pointed to the global rise of open-source AI technologies in China and Europe.

Alibaba’s International Digital Commerce Group includes AliExpress, Lazada, Daraz and Trendyol. It reported revenue of 4 billion dollars in Q3 2023, which means an increase of 44% compared to the previous year.

Featured Image: Alibaba