Alibaba's Taobao and Tmall Group pushes new AI tools to boost merchants' service to consumers in first major move after leadership reshuffle

Alibaba Group Holding's main e-commerce unit is now beta testing artificial intelligence (AI) tools and functions for merchants on its Chinese online shopping sites, marking the first major move at the enterprise since a leadership reshuffle in December.

The Taobao and Tmall Group (TTG) unveiled the new AI features, which are designed to improve services and attract new customers, at its "sellers' conference" held on Tuesday in Hangzhou, capital of eastern Zhejiang province and home base of South China Morning Post owner Alibaba.

TTG said AI models would be employed to transform Dianxiaomi, a customer service chatbot, to enhance seller-consumer interaction. That will include tasks such as pre- and post-sales service, data analysis and other online sales activities.

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The updated Dianxiaomi, which is currently undergoing tests with a select group of sellers, will be made available to all merchants by June, according to TTG. It said the accuracy rate of Dianxiaomi's response time has so far improved to 85 per cent.

The Tmall app is a popular marketplace for international and major Chinese businesses to sell brand-name goods to domestic consumers. Photo: Shutterstock alt=The Tmall app is a popular marketplace for international and major Chinese businesses to sell brand-name goods to domestic consumers. Photo: Shutterstock>

TTG also vowed to provide "quality merchants" more exposure to consumers, from the homepage to advertised search results, TTG announced at the event.

TTG's adoption of AI tools shows the effort being made by the Alibaba unit to fend off increased competition from main domestic rival JD.com and the challenge from younger platforms, such as PDD Holdings' Pinduoduo and ByteDance-owned Douyin.

The move comes weeks after Eddie Wu Yongming was named the new chief executive at TTG, replacing Trudy Dai Shan. TTG subsequently promoted six millennial executives to lead key departments.

Before TTG's latest initiative, Alibaba's international business-to-business wholesale marketplace Alibaba.com in November announced a new AI tool to help the platform's merchants automate their client-facing operations, including writing emails, to entice more customers overseas.

At the seller's event in Hangzhou, TTG said internal statistics showed that five-star-rated sellers enjoy a significantly higher repurchase rate than certain 3-star stores on its platform. The repurchase rate at five-star pet supply stores, for example, is about 127 per cent higher than those of 3-star peers.

TTG on Tuesday also said it will launch a new rating system for online shops, focusing on indicators related to consumer services. These indicators include the "rejection rate of refund request" and "platform intervention rate", which weigh on consumers' purchasing decisions.

Late in December, both JD.com and Taobao said they will offer a "refund only" policy so consumers can keep the goods they had bought but complained about - matching an option that budget online retailer Pinduoduo has had in place since 2021.

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