Alibaba Executive Reportedly Says Firm Beginning To See Return On AI Investment In E-Commerce: Expects ‘Very Significant’ Positive Impact

Alibaba’s (BABA) Vice President Kaifu Zhang reportedly told reporters on Thursday that the company was seeing a recovery from its artificial intelligence investment in the e-commerce operations.

According to a CNBC report, Zhang, who looks after the company’s e-commerce AI applications, shared that Alibaba deployed multiple AI tools aimed at boosting personalized user experience and also virtual try-ons of clothing. The report, citing Zhang, said that the initial testing has shown that AI has generated steady results with a 12% rise in advertising spend returns.

“It’s very rare to see double-digit changes” in such tests, Zhang said in Mandarin and translated by CNBC. The report noted that he forecast a “very significant” positive impact mainly from the company’s AI investment, which will help boost Alibaba’s gross merchandise volume during the November 11 Singles Day shopping period.

NYSE-listed shares of BABA traded nearly 0.5% higher in Thursday’s pre-market session. Retail sentiment on Alibaba remained unchanged in the ‘bearish’ territory compared to a day ago, with message volumes at ‘normal’ levels, according to data from Stocktwits.

The report said that research firm Syntun had forecast a 20.1% rise in sales to 1.11 trillion yuan ($155.75 billion), compared to a year ago, for Alibaba’s Tmall, JD.com and PDD during the Singles Day last year. This came at a time when consumer spending in China had been lull in the last few years. 

According to the CNBC report, Alibaba had noted during its last earnings that AI and consumption were “two major historic opportunities” making it a need to invest at a “historic scale” in these two. 

In September, a CNBC report cited CEO Eddie Wu saying, “We are vigorously advancing a three-year, 380 billion [yuan] AI infrastructure initiative with plans to sustain and further increase our investment according to our strategic vision in anticipation of the [artificial superintelligence] era.”

U.S.-listed shares of Alibaba have gained over 95% this year.

1 Yuan = $0.14

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