I recently did a series of articles on Alibaba’s GenAI strategy. Which is a pretty cool subject. You can find that at:

• Alibaba’s Generative AI Strategy Begins with Transforming Core Products and Operations

But the short version is that Alibaba appears to be doing 3 things in GenAI right now:

1 – Alibaba Is Aggressively Putting GenAI into Cloud Services

No big surprise.

All the cloud services businesses are putting GenAI capabilities into their offerings. It’s also the home for their AI tech stack and LLMs.

I’m not going to focus on this here.

2 – Alibaba’s New DingTalk AI Assistant is their Most Exciting New Product

Alibaba has announced their new DingTalk AI Assistant. And this is pretty exciting.

Basically, they are embedding their multimodal foundation models into DingTalk, which is their competitor to WeChat. Although with more of an enterprise focus.

I think they are going to fundamentally change DingTalk from mostly an enterprise messenger and collaboration tool (think Slack) into a full-fledged AI agent. It’s their most exciting move into new AI services (thus far).

3 – Alibaba Has Been Putting GenAI into its Core Ecommerce Products

This is the focus on this article.

Taobao and Tmall are marketplace business models. So, putting GenAI into products means putting it into the products and services used by both customers and by merchants / brands. Plus, advertisers as well.

Most of the focus today appears to be on new GenAI tools for merchants. Alibaba has said:

“more and more SME merchants are starting to leverage AI to enhance their operating efficiency. 17,000 SME merchants have subscribed to the AI business helper launched on Alibaba.com and millions of products have now been launched with AI. Searches for AI-optimized products have increased by 37%.”

The goals with these new GenAI-infused merchant / brand products are:

• To help merchants improve their services and attract more customers in a cost-effective manner. Helping merchants increase their customers and increasing customer satisfaction are usually the key ROIs. Alibaba recently said that that merchants on Taobao are achieving “one of the highest ROIs for their marketing investments compared to any other platform available today”.
• To level the playing field with large merchants and brands. For twenty years, Alibaba has been talking about how it builds tools that give SMEs the same capabilities as large merchants and brands. It was expected that they would do the same with new GenAI tools.

Keep in mind, Alibaba has been making big moves in its marketing services for merchants. They are talking a lot about “monetization ad products”, saying they “will continue to launch planned monetization products and gradually introduce new monetization mechanisms in the second half of the year.”

I’ll take you through some more details on these GenAI ecommerce tools below. But first I want to point to something I have been talking about a lot – which is Rate of Learning and Adaptation as a new dimension of business and competition.

“Rate of Learning and Adaptation” Is Where GenAI Becomes an Advantage

I have been talking about a GenAI strategy. Which means breaking down how these new tools and capabilities change:

1. Building products, getting customers, and growing.
2. Improving operational performance. 
3. Building a moat.

Here’s my standard slide for digital strategy.

Here’s a version that is easier to remember.

I wrote 7 articles about all this for GenAI.

• Step 1 of the Generative AI Playbook Is Products and Some Ops (1 of 6)

But the key concept is Rate of Learning and Adaptation. This is when GenAI goes from being a necessary operating activity to a new dimension of business and competition. It’s where you can beat competitors. The details of that are here.

• Rate of Learning by Machines as an Operating Activity vs. Moat (5 of 6)

Basically, my argument is that every business is building intelligence into their operations. This is increasingly required. Doing things cheaper, faster, and/or better is going to be a standard operating requirement.

However, this gets much more interesting when a business can use these tools to learn and adapt much faster.

• That is when products can get much better. Because they can change faster in response to customer changes or interests.
• This is when a company can beat slower and less agile competitors.

I have argued that, in select cases, Rate of Learning and Adaptation can create a big advantage as a Digital Marathon. And, in select cases, it can create a Barrier to Entry as a CRA.

With that in mind. Let’s take a look at Alibaba’s new GenAI ecommerce tools again. Because this looks to me a lot like a Rate of Learning and Adaptation strategy.

Alibaba’s New Ecommerce GenAI Tools Are About Rate of Learning and Adaptation

Here’s a recent article in Alizila.

• Taobao and Tmall Upgrades Consumer Shopping Experience and Merchant Support Through AI

Alizila is an Alibaba publication. And in it, they provided some good detail on new GenAI tools for ecommerce. In fact, the article lists two bullet points at the very top (I added the bold).:

• “Taobao and Tmall’s AI-driven innovations offer consumers an enriched online shopping experience”

• “Brands and merchants thrive on Taobao and Tmall with AI-driven tools to better engage and serve shoppers”

So, they are embedding GenAI into their products for customers and brands/merchants.

For consumers, it’s pretty straightforward.

The big tool is Wenwen, Alibaba’s LLM-powered GenAI app. This is now embedded in the Taobao app. It’s basically a shopping assistant that is trying to transform the consumer experience and relationship.

Instead of consumers engaging by search and newsfeeds, consumers will increasingly be able Q&A interactions. And ongoing discussions. Wenwen will generate product recommendations. But this is not a chatbot.

• Think personalized conversations. That go on for years.
• Think summaries and discussions of the pros and cons of different products.
• Think personalized product discounts and promotions.
• Think an AI assistant that can create lots of content such as short videos and livestreams.

You’re really looking at the first stages of a new consumer-machine interface. Note: this has already been rolled out during the 6.18 festival. It is (potentially) a big upgrade in the consumer experience.

But now think about this through the lens of Rate of Learning and Adaptation.

• Imagine a consumer interface that can learn about you and your interests on a minute-by-minute basis.
• Imagine that it can change its responses, its product suggestions, created content (text, video, images) and personalized promotions for you just as fast.
• Imagine it can also actively assess and adapt to your emotional state minute-by-minute.

That is something quite powerful. Intelligence is required. But rapid learning and adaptation is how you dramatically improve the product. And beat competitors.

For merchants, the GenAI tools are more complicated.

Alibaba’s tools for merchants / brands seem to have multiple goals. It’s definitely about improving “operating efficiency for merchants”. That includes GenAI tools for:

• Creating images and marketing content. There are lots of content creationtools for merchants and brands. Not a big surprise as generative AI is really good at generative content. Think more and better marketing and communication with customers. It should enable increasingly personalized marketing and communication.
• Customer service chatbots (including the customer service chatbot Ali Xiaomi). This is something that merchants can use to reach and interact with their customers.
• AI-based business analytics. Their market insight monitor Business Advisor is now available to merchants.

All of that is interesting and will be table stakes for ecommerce. But, again, I think the most interesting aspects are when it enables rapid learning and adaptation.

Alibaba Is Rolling Out 4 Types of GenAI Tools for Ecommerce Merchants

Here’s a good summary of their merchant tools (from the Alizila article).

1. Visual Generative Tools.

Basically, this lets merchants manipulate their images cheaper and faster. You can change out the models. You can change the backgrounds. This makes sense in areas like fashion and furniture. And there is an immediate ROI in cost and speed. Fewer photo shoots.

But you also want to improve effectiveness. GenAI should be able to make better photos (because it’s smart). And also, because you can now do versions really fast and cheap and test which get the best response. Alibaba says the click-through rate for the AI-enhanced images has improved by 25%.

2. Text Generation for Marketing Content.

Obviously, this is a big area.

The interesting part is not just doing copywriting and editing. It’s about the ability to do product descriptions and titles based on currently trending keywords. Based on consumer insights. And based on performance. You really want text generation to be a dynamic and adaptive process. Which it mostly isn’t today.

The KPIs here are visibility and conversion for products. Plus, you want to improve interactions with followers.

3. Market Insights with Business Advisor.

This one surprised me.

Taobao and Tmall are offering Business Advisor to merchants, which is a market insight monitoring tool. The big use case here is better understanding and predicting consumer demand. But this also includes industry and competitor analysis. That’s really interesting. I would put my product on Taobao just to use this tool. They will also have better tools and customer reach than any individual company.

The immediate payoff here is obviously cost and speed (i.e., productivity). And probably an immediate performance boost. But the ability to learn quickly and make real-time adjustments is really compelling.

4. Ali Xiaomi, a Smart Customer Service Chatbot

This is pretty standard. It’s a Qwen-powered chatbot for merchants. Basically, a chatbot upgrade that should be smarter. But specifically for customer service (“where’s my package?”). Not as the primary user interface.

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That’s it. Hope this was helpful.

Cheers, Jeff

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Related articles:

• GenAI Playbook (Step 3): How to Build Barriers to Entry with Intelligence Capabilities (9 of 10) (Tech Strategy)
• AutoGPT: The Rise of Digital Agents and Non-Human Platforms & Business Models (Tech Strategy – Podcast 163)
• Why ChatGPT and Generative AI Are a Mortal Threat to Disney, Netflix and Most Hollywood Studios (Tech Strategy – Podcast 150)

From the Concept Library, concepts for this article are:

• Generative AI
• Ecommerce
• SMILE Digital Marathon: Rate of Learning and Adaptation

From the Company Library, companies for this article are:

• Alibaba: Tmall and Taobao

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.

This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.