Despite facing stiff competition in China’s e-commerce market, Alibaba Group Holding Ltd (NYSE:BABA) is harnessing the power of artificial intelligence (AI) to bolster its edge. One notable application is Wenwen, an AI chatbot on Alibaba’s Taobao platform, which provides personalized product recommendations based on user preferences. For instance, Wenwen might suggest a Sony Group Corp (NYSE:SONY) camera priced around $650 tailored to the user’s needs. Powered by Tongyi Qianwen, or Qwen, a sophisticated language model developed by Alibaba’s cloud division, Wenwen enhances the shopping experience by offering tailored recommendations.
Moreover, Alibaba is leveraging generative AI to streamline merchant operations, simplifying tasks like photo editing and virtual model creation. Despite these advancements, Alibaba reported a modest 10% increase in net profit to 79.7 billion yuan ($11 billion) for the fiscal year ending March, with revenue growing 8% to 941.1 billion yuan.
Although Alibaba’s Taobao and Tmall platforms have witnessed a decline in market share from 80% in 2017 to 37% in 2023, CEO Eddie Wu highlighted double-digit growth in gross merchandise value (GMV) for these segments in the first quarter of the year. Analysts attributed this growth to discounts and anticipate double-digit growth in the cloud business in the latter half of fiscal 2025.
Despite these positive indicators, BABA stock has experienced a decline of over 4% in the last 12 months, reflecting investor concerns amidst market challenges and evolving competition.
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