Alibaba Group Holding Ltd. e-commerce division will make “huge” investments in its Taobao shopping app after the Chinese company’s restructuring produced six new units able to raise funds and seek listings independently.
(Bloomberg) — Alibaba Group Holding Ltd. e-commerce division will make “huge” investments in its Taobao shopping app after the Chinese company’s restructuring produced six new units able to raise funds and seek listings independently.
The subsidiary will put a particular focus on content creation as a conduit to bring more users onto the platform, and it’ll also launch artificial intelligence-powered tools for merchants, said Trudy Dai, chief executive officer of the newly spun-off Taobao Tmall Commerce Group.
“We will make huge, historic investments to scale up the user base for the benefit of merchants,” she said at a conference last Wednesday, in remarks shared by the company on Monday. “We will drive content creation in all areas, with much larger investment in content than ever before.”
Alibaba’s content push is likely a response to ByteDance Ltd.’s Douyin and similar short-video and livestreaming platforms increasingly getting into the ecommerce space. As young people buy more goods they see on video, incumbent leaders like Alibaba face pressure to deliver a similar experience.
Additionally, 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.
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The announcement comes ahead of Alibaba’s first-quarter results on Thursday, with analysts estimating a sub-3% sales increase as the industry grapples with China’s uneven post-pandemic recovery and the lingering impact of Beijing’s crackdown on Big Tech. As the country’s online commerce leader, Alibaba carried out an historic overhaul in March that paves the way for its units from cloud, logistics, and ecommerce 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 Co., and its grocery chain Freshippo. More recently, the group’s international online shopping unit has also been said to have been in the early stages of exploring a US public listing.
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 signaled it will mandate a security review of generative AI services before they can be put into operation.
–With assistance from Jinshan Hong.
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