Alibaba vows ‘historic’ investment in Taobao and content

ALIBABA Group Holding’s e-commerce division will make “huge” investments in its Taobao shopping app, as the newly created arm seeks to ward off competition from social media platforms.

The subsidiary aims to focus on content creation as a conduit to bring in more users and will also launch artificial intelligence (AI) powered tools for merchants, said Trudy Dai, chief executive officer (CEO) of the Taobao Tmall Commerce Group.

That push is likely a response to a still-anaemic online commerce market and growing competition from ByteDance’s Douyin and other short-video and live-streaming platforms. As young people buy more goods they see on the video, incumbent leaders like Alibaba face pressure to deliver a similar experience. Taobao will make “timely adjustments” to its platform fees and commission rates to benefit merchants, according to Dai. They’ll also be provided with an expanding suite of free smart operation tools.

“We will make huge, historic investments to scale up the user base for the benefit of merchants,” she said at a conference last Wednesday (May 10), in remarks shared by the company on Monday. “We will drive content creation in all areas, with a much larger investment in content than ever before.”

Alibaba’s shares gained 3.5 per cent in US trading, in part because its annual report cleared a previously disclosed regulatory review.

The announcement comes ahead of Alibaba’s first-quarter results on Thursday, with analysts estimating a sub-3 per cent sales increase as the industry grapples with China’s uneven post-pandemic recovery and the lingering impact of Beijing’s crackdown on Big Tech. Last week, closest rival JD.com posted a 1.4 per cent gain in revenue for the quarter, its slowest pace of growth on record.

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As the country’s online commerce leader, Alibaba carried out a historic overhaul in March to create six new companies, paving the way for its cloud, logistics, and ecommerce units to debut on public markets.

CEO Daniel Zhang said at the time that the company would consider gradually giving up control of some of the units, and already there have been preparations for initial public offerings in Hong Kong for the logistics arm, Cainiao Network Technology, and its grocery chain Freshippo. More recently, the group’s international online shopping unit has also been said to be exploring a US public listing.

Taobao Tmall would be the one exception and the plan is for it to remain a wholly-owned Alibaba entity, executives have said.

Dai didn’t provide more specifics about AI. Along with China’s other tech leaders, Alibaba has made AI development a priority as a flurry of investments and talent have entered the burgeoning sector following the launch of OpenAI’s ChatGPT. The company has said it expects to incorporate its large language model, Tongyi Qianwen, into all of its products and services in the near future, even as Beijing’s regulators have signalled it will mandate a security review of generative AI services before they can be put into operation. BLOOMBERG