AI-enhanced images with a variety of background styles. Photo credit: Alibaba Group

Alibaba Group’s China commerce business is leveraging a wide range of AI features to transform the digital shopping experience while boosting operating efficiency for merchants.

Taobao and Tmall Group (TTG) is the platform company’s core e-commerce division, as well as a locus of digital retail innovation fueled by large language model (LLM) Qwen.

TTG platforms have unveiled a suite of AI-powered tools from personalized consumer-facing chatbots to visual generation applications for merchants.

The business is pursuing three core strategies articulated by Alibaba Group CEO Eddie Wu in November: “To put users first, build an ecosystem for brands and merchants to thrive on our platform, and realize AI technology-driven innovation.”

With China’s second-largest shopping festival now in full swing, we take a closer look at how AI is reshaping the digital journeys of merchants and consumers alike on Taobao and Tmall.

Transforming the Consumer Experience

Taobao and Tmall consumers have long had access to tailor-made user interfaces and personalized recommendations, enabled by consumer insights and algorithms. Now, Alibaba’s AI capabilities are being leveraged to upgrade the user experience.

Consider LLM-powered generative AI application Taobao Wenwen.

Wenwen — Mandarin for “asking” — launched in beta form in September 2023 and is embedded within the Taobao app. It is the first full integration of AI into a user application for e-commerce in China.

Through question-and-answer interactions, the AI-powered shopping assistant generates detailed product recommendations along with further questions to guide consumer purchasing decisions and includes multi-media content such as short videos and livestreams.

Consumers use Wenwen to summarize the pros and cons of similar products, and generate purchase recommendations.

During promotional campaigns, Wenwen helps users lock in the best deals by enabling them to identify the most cost-effective offerings and obtain instant pricing analysis. Millions of users have used Wenwen since its launch, especially during shopping festivals like 11.11 and 6.18, to maximize the various vouchers and discounts available.

Boosting Operating Efficiency for Merchants

To improve merchant operating efficiency, Taobao and Tmall rolled out 10 AI tools to a select group of merchants in October 2023 and then made these available to all merchants in early 2024. These AI tools included generative AI applications to create images and marketing content, customer service chatbots, and AI-based business analytics.

The AI tools were used more than 1.5 billion times during 11.11 last year.

Ahead of this year’s 6.18 Mid-Year Shopping Festival, Taobao and Tmall expanded its suite of AI tools to make customer service chatbot Ali Xiaomi and market insight monitor Business Advisor freely accessible to merchants.

We break down four of the merchant AI tools below:

• Visual Generative Tools

With Taobao and Tmall’s visual generative tools, merchants can upload their product images and then manipulate them using AI tools, including changing the models pictured and inserting the models into various background styles.

For example, merchants selling furniture and home goods can use the visual generative tools to insert an image of a person set against a background of their choice.

This, along with other features, can significantly reduce costs for merchants by decreasing the need for expensive photo shoots and visual productions.

Over 20,000 brands in the home category have deployed the AI virtual photo shoot setting technology, generating over 900,000 product display images as of April 2024. Compared to the basic original photos, The click-through rate of the AI-enhanced images improved by 25%.

• Text Generation for Marketing Content

Taobao and Tmall’s AI tools can generate product descriptions and titles based on trending keywords and consumer insights to support merchants’ marketing efforts.

Using that base, the tools can create and publish posts on in-app social media channels in the style and tone that align best with the merchant and their products.

This content helps boost visibility and conversion for merchants’ products while significantly improving their interactions with their followers.

• Market Insights with Business Advisor

Taobao and Tmall developed Business Advisor, an AI-powered market insights monitoring tool, to support merchants’ operational analytics needs.

By leveraging consumer demand insights and industry and competitor analysis, Business Advisor helps merchants capture new opportunities to grow their businesses.

Business Advisor’s simple user interface and robust AI-driven analytics equip merchants with the information they need to make real-time adjustments to optimize critical areas of their business, such as product assortment.

• Ali Xiaomi, a Smart Customer Service Chatbot

Ali Xiaomi, also known as Ali Assistant, is a Qwen-powered chatbot that allows merchants to provide a superior customer service experience around the clock.

Compared to traditional chatbots, Ali Xiaomi provides more accurate, personified answers.

It can also respond to a wide variety of inquiries and requests, including product recommendations, sales and discounts, order tracking, and exchanges and returns, all while minimizing wait times.

Ali Xiaomi helps small and medium-sized merchants tackle issues such as insufficient customer service staff, limited service hours, and inconsistent quality of service.

Through these innovations, merchants are thriving with AI tools on Taobao and Tmall, transforming the online shopping experience for all.