How is the E-commerce Industry Developing? Alibaba, JD.com, and Others Compete to Bet on AI E-commerce
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Alibaba, JD.com, and Others Compete to Bet on AI E-commerce
Online shopping, mobile payments, live-streaming sales... Today, e-commerce has integrated into all aspects of people's production and daily lives, becoming an important way to enhance the quality of life. Reports show that in 2023, China's online shopping user base reached 884 million, accounting for 82.0% of the total internet users. According to the Ministry of Commerce, the national online retail sales in 2023 reached 15.42 trillion yuan.
With the advancement of internet technology and the development of industries such as logistics, China's e-commerce has secured the top position globally in terms of online retail market size, number of online shoppers, digital express delivery services, and mobile payments, becoming a vital force in facilitating the dual circulation of domestic and international markets.
China's e-commerce industry is undergoing a transformative qualitative change. Whether it's Alibaba, JD.com, Pinduoduo, or Baidu, the prevailing attitude now is to seize opportunities rather than miss them. Currently, Alibaba has formed an AI e-commerce team and is developing an AI e-commerce product called "Huiwa" for merchants and influencers. This product aims to enhance efficiency in generating marketing content and training exclusive AI models for Taobao and Tmall merchants and influencers, enabling rapid product promotion. From JD.com's retail-related departments, it is learned that some designers have transitioned to product operations roles.
Analysis of E-commerce Industry Development
In 2023, Pinduoduo's market value surpassed Alibaba's, drawing widespread attention. Even Jack Ma made a rare statement on the internal network, concluding with, "The AI e-commerce era has just begun, presenting both opportunities and challenges for everyone." In March 2023, Alibaba launched a top-down organizational restructuring. Under Alibaba Group, six major business groups were established: Alibaba Cloud Intelligence, Taobao Tmall Commerce, Local Services, Cainiao, International Digital Commerce, and Digital Media and Entertainment, along with several business companies. These entities will each form their own boards of directors, operate independently in the market, and implement a CEO accountability system to drive new growth momentum for Alibaba. However, as the restructuring progresses, challenges such as the delayed IPO of Freshippo and the halted spin-off of Alibaba Cloud have introduced more uncertainty about Alibaba's future development. With the rapid growth of Pinduoduo, Alibaba is also facing increasing pressure.
On the eve of the Chinese New Year, Alibaba Group released its financial results for the third quarter of fiscal year 2024 (ending December 31, 2023), half a month earlier than last year.
During the reporting period, Alibaba's revenue reached 260.348 billion yuan, a year-on-year increase of 5%; operating profit was 22.511 billion yuan, down 36% year-on-year; and net profit was 10.717 billion yuan, a 77% decrease year-on-year (35.029 billion yuan).
One of the highlights of this financial report was the performance of Alibaba International Digital Commerce Group, particularly AliExpress.
During the reporting period, the revenue of Alibaba International Digital Commerce Group (AIDC) increased by 44% year-on-year to 28.516 billion yuan, with overall orders growing by 24% year-on-year. Among them, international retail commerce revenue reached 23.26 billion yuan, up 56% year-on-year. This growth was primarily driven by strong performance across all major retail platforms, robust order growth in AIDC's retail commerce, revenue contributions from AliExpress Choice, and improved monetization rates.
It is reported that AliExpress achieved over 60% year-on-year order growth, Trendyol maintained double-digit order growth, and Lazada narrowed its losses per order year-on-year. Additionally, terms like "cross-border e-commerce" and "live streaming" have become frequently mentioned buzzwords among foreign trade enterprises.
Data released by China's Ministry of Commerce shows that in 2023, China's cross-border e-commerce imports and exports reached 2.38 trillion yuan, a year-on-year increase of 15.6%. Of this, exports accounted for 1.83 trillion yuan, up 19.6% year-on-year. These figures reveal some new trends in China's foreign trade. Among them, digital foreign trade methods like cross-border live streaming sales have become important channels for foreign trade enterprises to secure orders and promote brand globalization. Industry insiders believe that the vigorous development of new foreign trade models like cross-border live streaming sales is of positive significance for stabilizing and improving the quality of China's foreign trade.
The continuous innovation in e-commerce models and formats has provided more diverse and flexible employment opportunities. According to the "14th Five-Year Plan for E-Commerce Development," the number of people employed in e-commerce-related fields is expected to reach 70 million by 2025. The new e-commerce industry has spawned new forms of employment and created new professions. For example, the live streaming e-commerce model has generated various new job positions such as hosts, assistant hosts, operations managers, and stage controllers. New e-commerce has also given rise to multiple peripheral industries, including supply chain service providers, live streaming operations service providers, data operations service providers, and warehousing and logistics service providers.