How Will AI E-commerce Develop in 2024?
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Since 2023, AI has become a highly buzzworthy topic. At the beginning of 2024, the video-generating SORA surprised everyone, revealing just how advanced AI has become.
While outsiders marvel at the spectacle, insiders focus on the substance. The explosive popularity of AI has led many to consider how to leverage it for business. Among these considerations, using AI for e-commerce and sales has become a key direction for major internet companies and entrepreneurs.
For example, Alibaba has established an AI e-commerce team and is developing a product called "Huaiwa" aimed at merchants and influencers. This tool will enhance efficiency in generating marketing copy, training exclusive AI models, and other creative tasks for Taobao and Tmall sellers, helping products gain rapid traction. Looking back over the past year, AI applications in the e-commerce field have flourished. Some have used AI-generated virtual influencers for live-streaming sales; others have leveraged AI to set up online stores with a single click. There are those who employ AI to create product promotional images, and others who utilize AI to manage fan communities and serve as intelligent customer service. It can be said that across the entire e-commerce chain, there have been some notable achievements.
Will AI in e-commerce explode in 2024? In which areas can AI be leveraged to enhance efficiency? Today, we will discuss these topics.
Recently, AI-generated virtual influencers for sales have become extremely popular. According to Xinbang reports, Douyin has recently seen a proliferation of AI-generated female influencers engaging in live commerce. Examples include @Wenrou with 1.27 million followers, @Xiaoyimei with 1.1 million, and @Shishi Department Store with 960,000 followers.
These AI beauties primarily target male users, creating content centered around relationship advice and motivational quotes, which has effortlessly garnered them hundreds of thousands to millions of followers.
Currently, these accounts mainly promote products through video-linked shopping carts, typically featuring low-priced items ranging from 9.9 to 39.9 yuan. Statistics from Xindou Data show that in the past month, three AI influencer accounts—@Wenrou, @Xiaoyimei, and @Xiaojiu—have collectively generated estimated sales exceeding 50,000 yuan. From a sales performance perspective, AI-powered product placement bloggers are still far behind top human influencers who can generate sales in the hundreds of thousands or even millions. However, AI-generated beauty influencers conducting product placement, with clear "AI identification" throughout the process, comply with platform regulations. This can be seen as pioneering a new track, and even allows for the mass replication of AI beauty influencer accounts for product placement.
In the field of digital human livestreaming for product placement, it's essentially a battleground for major tech companies. According to JD.com's report, during the 2023 618 shopping festival, the number of merchants using Yanxi digital humans for livestreaming increased by more than five times compared to the previous Double 11 event. Baidu's e-commerce platform Huixing launched a 24/7 non-stop livestreaming plan, with high-quality livestream rooms achieving single-session GMV as high as 3 million yuan.
From a revenue perspective, AI-powered livestreaming for product placement generates higher earnings than AI-powered product placement via attached links, but it also comes with higher technical challenges and relatively larger investment costs. Major tech companies have launched AI applications that can recommend products, such as ByteDance's Doubao, Alibaba's Taobao Wenwen, and Xiaohongshu's Da Vinci. When users ask questions within these apps, they automatically recommend products, functioning like AI shopping assistants.
Beyond AI-powered live streaming sales, AI product recommendations, and AI shopping assistants that interact more directly with consumers, AI has been transforming various aspects of e-commerce over the past year. This includes tools for store setup, product imaging, intelligent customer service, and business consulting throughout the AI e-commerce ecosystem.
The explosive growth of AI applications in e-commerce has made platforms realize that AI-powered e-commerce is a crucial battlefield for the future, creating even a sense of 'crisis' for giants like Alibaba. On November 29, 2023, after Alibaba's market value was surpassed by Pinduoduo, Jack Ma stated on Alibaba's internal network: 'The era of AI e-commerce has just begun, presenting both opportunities and challenges for everyone.' Alibaba CEO Wu Yongming also emphasized that AI will be one of the three top priorities, aiming to implement AI+e-commerce first.
Alibaba has now established an AI e-commerce team and is developing a product called 'Huiwa' for merchants and influencers. This tool will help Taobao and Tmall merchants and influencers improve efficiency in generating marketing content, training AI models, and quickly promoting products. This marks a concrete step in Alibaba's AI e-commerce strategy.
The e-commerce business primarily revolves around three key areas: traffic, channels, and customer service. Over the past year, new AI applications have emerged in all three aspects. Many e-commerce practitioners have long suffered from excessively high "traffic fees." For merchants who lack traffic-generation capabilities, they must bear the high costs of paid traffic, influencer marketing, and livestreaming slot fees. In essence, they have no organic traffic and must purchase it.
As mentioned earlier, AI-generated content such as beauty videos with shopping links and digital human livestreams have become adept at "mining" traffic from public domains.
What pleasantly surprises merchants even more is the low cost of AI beauties and digital human livestreams. Taking digital livestreaming as an example: a human host typically costs ¥20,000 monthly in salary, while an AI host requires a one-time customization fee of ¥8,000 plus an annual system usage fee of ¥80,000. By switching to digital hosts, businesses can save ¥100,000 annually per host. For twenty hosts, this translates to annual savings of ¥2 million. Operation Society previously interviewed a company specializing in digital humans, Silicon Minds, which revealed that digital human prices are continuously decreasing. Soon, spending just a few hundred yuan to own a stable, user-friendly, and live-streaming-capable digital human will no longer be a dream.
On the other hand, the advantage of using AI to manipulate traffic lies in its batch reproducibility, making it more suitable for large-scale enterprise operations.
For example, in video-based sales, a large number of videos can be quickly generated and distributed in bulk. For live streaming sales, 24/7 uninterrupted broadcasts are possible, with the same model capable of streaming across multiple platforms simultaneously. While AI's sales conversion ability may lag behind human influencers in individual sessions (as shown in previous data), overall considerations of time and cost reveal that both AI and human influencers have their respective strengths. However, AI continues to evolve, whereas human-driven live commerce has long been stuck in intense competition.
Additionally, the emergence of AI has brought new changes to advertising strategies. The combination of "content + ad placement + user characteristics" allows specific content to be displayed to targeted users.
For example, in a weather forecast app, AIGC can generate different weather-related content based on various city weather scenarios, enabling precise targeting to local audiences. This creates an immersive experience for users, enhancing both engagement and conversion rates. In addition, features like UBMax from Ocean Engine offer intelligent creative generation and automated ad placement paths based on deep objectives.
A notable case last year was 36Kr, which used AI to set up an entire store during the 618 shopping festival, achieving over 50,000 yuan in sales within a week.
E-commerce stores, as key points for traffic conversion, often undergo upgrades during major promotions or anniversaries. These processes are not only labor-intensive but also prone to setting errors. Currently, most e-commerce platforms have launched their own AI store setup tools, such as JD.com's Jingdian. These tools leverage AI capabilities to automatically generate product images, saving costs on models, photography, and post-production.
Now, setting up a store can be done with a simple one-click operation. For large-scale brands and enterprises, these tools enable rapid deployment of matrix accounts and cost reduction.
Additionally, user preferences vary across different channels. In the past, to operate effectively on multiple platforms, merchants might have needed a 'knowledgeable' operator for each platform. However, AI now offers business advisory functions, providing tailored recommendations for different platforms. Youzan's Baiya shared a case study about their AI during a presentation: "Brand merchants can ask questions to get platform-specific business strategies from AI. For example, if you tell the AI you want to organize a New Year's sale, the AI will summarize your successful and unsuccessful strategies from the past year, then provide several recommendations based on current market conditions. If you choose a particular direction, you can further refine the strategy—for instance, how to achieve a 20% profit margin or what to do if you're willing to accept a 10% profit margin by sacrificing half of the gross margin."
Many merchants have previously expressed pain points such as high turnover among customer service staff, lengthy training periods for new hires, and the difficulty of providing 24/7 quality service to consumers.
As a result, many companies have shifted their R&D focus to AI-powered customer service solutions. Examples include the intelligent customer service systems used by China Unicom, China Mobile, banks, and even major internet companies. In June 2020, CMB executives stated: "Currently, our service robots powered by big data and AI cost one-tenth of human labor while delivering nine times the output." According to CMB's 2022 annual report, their AI customer service capabilities have replaced 12,000 human positions.
Daily People reports that while current ChatGPT-enhanced AI agents may have 10% lower accuracy than human agents, they reduce costs by 70%. The upgraded AI customer service now features emotional settings, making interactions more human-like.
Although current AI customer service cannot fully address consumers' complex and diverse issues, the market remains optimistic about its development potential. According to the 2023 China Intelligent Customer Service Market Report released by the internationally renowned market research firm Sullivan, China's intelligent customer service market reached 6.68 billion yuan in 2022 and is expected to grow to 18.13 billion yuan by 2027, with a compound annual growth rate exceeding 20% over five years.
Operation Society analyzed three aspects of AI e-commerce—traffic, channels, and services—and found that a key reason companies are adopting AI is its ability to reduce costs and improve efficiency. Whether it's replicating successful cases at scale with AI or enabling AI to capture every potential consumer 24/7, these factors contribute to the popularity of AI in e-commerce. According to iResearch's "2023 China AIGC Industry Panorama Report," the scale of China's AIGC industry in 2023 was approximately 14.3 billion yuan, and it is expected to reach 720.2 billion yuan by 2028.
From a growth perspective, starting in 2024, the entire industry will experience three consecutive years of doubling growth. Such a high-speed growth market has also led many to consider "taking a chance."
Over the past year, groundbreaking products from the AIGC sector have continuously emerged. The debut of Sora at the beginning of 2024 brought excitement to the AI e-commerce industry. Many now have higher expectations for AI-generated videos. If Sora's technology matures, it could quickly produce a large volume of product promotion videos comparable to real-life footage, enabling AI e-commerce to capture more traffic and drive industry-wide growth. In addition, over the past year, multiple internet companies we've engaged with have reported product upgrades in specific segments of e-commerce. For instance, OKKI, a platform specializing in cross-border e-commerce, offers features such as automatic translation for writing business development emails (outreach emails for foreign trade cooperation), 24/7 customer service to accommodate time zone differences, and assistance with business strategies tailored to different countries' policies.
From the increased investments by internet tech giants to the continuous emergence of groundbreaking products, the application of AI in e-commerce remains highly active and dynamic.
On the other hand, the massive GMV (Gross Merchandise Volume) of the e-commerce industry has also made it a top choice for those looking to monetize AI. Du Peng, a partner at Jinshajiang Venture Capital, mentioned: "The global e-commerce transaction volume amounts to $6.3 trillion, maintaining a growth rate of around 10% in recent years. With such a massive GMV, if AI can bring a 1% efficiency improvement and AI e-commerce companies capture one-fifth of the revenue, the entire AI e-commerce market could reach a size of $15 billion."
So, how can e-commerce entrepreneurs leverage AI to achieve explosive business growth in 2024?
First, generative AI will widely serve as an e-commerce assistant. To excel in e-commerce, it is inevitable to learn and apply AI. However, it's important to note that AI is not a panacea—it is merely a tool to assist in business operations. Secondly, using AI to cater to personalized audiences. With AI's capabilities, it's possible to quickly achieve mass personalization, delivering suitable "product recommendations" to corresponding consumers to improve conversion rates. Currently, there are AI-powered advertising tools that enable personalized ad placements.
Finally, leveraging AI to reduce costs and increase efficiency. In today's highly competitive e-commerce landscape, thriving requires not only pursuing sales but also profitability. Utilizing AI to cut unnecessary costs allows merchants to save more revenue and allocate resources to more critical areas. Over the past year, AI e-commerce has experienced rapid growth, with a surge of internet and technology companies entering the field and developing numerous AI-powered e-commerce tools.
Many businesses have leveraged these AI products to tap into traffic, establish channels, enhance services, and achieve business growth.
AI is still in its explosive growth phase. In the coming years, AI e-commerce may truly become 'intelligent,' efficiently helping businesses generate revenue. There are still opportunities and benefits for those entering the market now.