Alibaba: Using AI to dominate the e-commerce industry

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From retail giants to mom-and-pop stores, Alibaba is forging an e-commerce empire unlike any other. Hot on the heels of Singles Day 2017’s success, Alibaba is now bringing small businesses into their digital fold.

In 1999, Alibaba was just one of many competing startup companies looking to cash in on the e-commerce boom. Today, it’s a tremendous online marketplace with sales transactions that outnumber that of eBay and Amazon combined.

Alibaba’s swelling popularity in the east can be traced to founder Jack Ma’s idea to capitalize on China’s biggest online shopping event: Singles Day. Established in 1993 on November 11th, Singles Day began as a celebration for all single Nanjing University students––a sort of unofficial anti-Valentine’s Day. When Ma strategically launched Alibaba’s first Singles Day online sale in 2009, he successfully captured the attention (and nearly unlimited spending power) of young, urban Chinese consumers.

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Since 2009, Singles Day has become practically synonymous with Alibaba and online shopping. While other e-commerce platforms have attempted to follow suit, none have matched what Alibaba’s marketplaces Taobao and Tmall managed to accomplish in such a short span of time: sales totalling $9.3 billion in 2014, reaching $14.3 billion in 2015, and achieving a jaw-dropping $17.8 billion in 2016.

In comparison, Adobe Analytics reported that American consumers spent $19.62 billion in the five day period spanning from Thanksgiving Thursday to Cyber Monday in 2017. In that same year, Alibaba toppled this number with a whopping new record at  $25.3 billion––in a single day.

How did they manage to blow US spenders out of the water, and in a fraction of the time?

Artificial intelligence.

It’s no big secret China aims to become the leading AI innovation center by 2030, and Singles Day 2017 provided an excellent opportunity for Alibaba to stress test their system capacity, using AI-assisted robots, drones, shopping algorithms, and some very sophisticated chatbots. The massive tax on their technological infrastructure was bolstered by supplemental aid from some 500 partnered banks, enterprises, and logistic companies.  

The integration of machine learning reportedly helped cover a wide spectrum of user experiences from product selection to final delivery, and also included:

  • Predicting product trends in real-time so retailers could meet demand.
  • Employing chatbot “Dian Xiaomi”, which understands over 90% of customer enquiries, and is advanced enough to determine customer emotion through text analysis.
  • Using robots for packing and transport and automated guided vehicles for delivery.

The end result? A seamless online shopping experience for millions of deal-seekers; retailers promoting their brands by selling off inventory in bulk; and consumers all around the world receiving discounted products more quickly than ever before.

However, even with such resounding success year after year, the giant never sleeps. In anticipation of a saturated e-commerce market, Alibaba is actively bringing small offline retailers into its digital fold by upgrading their facilities and into their vision of the smart stores of the future.

As of this posting, Alibaba has amassed over 1 million small businesses under its wing; the stores enjoy technology, services and support that skyrocket their margins, while Alibaba, as their sole supplier through the integrated “Alipay” app, boosts both revenue and brand identity.

Fortunately for Western competitors like Amazon and Walmart, Alibaba still has significant hurdles to cross before becoming the world’s dominant e-commerce leader. Due to low brand recognition outside of Asia, accusations of fake goods, and murky legalities of international trade preventing expansion, Alibaba remains almost entirely dedicated to Chinese consumers, but that doesn’t mean Singles Day sales won’t eventually find their way to the Western market.

What do you think? Will you be shopping on Singles Day 2018? Do you think Alibaba has the potential to beat out Amazon as the world’s most recognizable e-commerce platform?

Let us know in the comments below!