Merchant-side AI Tools are Disrupting China E-commerce Experience

AI is a big thing for big e-commerce platforms in China, and leading players such as Alibaba, JD.com and Bytedance is continuing to empower merchants with new AI tools that can acclerate their growth. Merchant-side Tools, in particular, has attracted more attention from the capital market as use cases in B2B and e-commerce could have significant value-add to these labor intensive segments. In 2024, it was estimated that there are over 70 million Chinese individuals engaged in e-commerce related roles¹, according to a research published by Chinese Ministry of Commerce this March. 

In this article, we attempt to analyse the big players' movements in the merchant-side AI tools, and how these tools are disrupting the e-commerce industry.

Alibaba's Effort in Seller-side LLM to Optimize Merchant's Operation Efficiency

Operating a store in Alibaba's Taobao and Tmall platforms (including Tmall domestic and Tmall Global) has been considered a must-have for many merchants given the vast market share and user traffic within the platforms. However, as one of the earliest and probably the most sophisticated e-commerce platforms, Tmall requires merchants to build and train a complete workforce to navigate the various functionalities within the platforms, which may in turn incur higher cost of operation. As e-commerce user growth slows, merchants also need to upgrade capabilities to increase efficiency of advertising, and use of advanced technologies to increase targeting accuracy, analytics, asset creation and budget management becomes must-have.

Tmall and Taobao Group (TTG) could be one of the earliest in the market to respond to merchant's requests for better tools, better mechanism and better systems. Fueled by Alibaba's own LLM Qwen, the e-commerce conglomerate have released various seller-facing tools and upgrades prior to June 18th of this year, and has since been upgrading. 

Merchants operating in TTG can now benefit from over dozens free AI tools within the platform's back-office, covering various aspects from image generation, video genration, text generation, analytics, customer service, smart logistics, advertising, etc. 

Merchants can generate model using AI technology. Photo Credits: Alizila

The newly released "Site-wide Advertising" is also a new ads tool released by Alimama, the marketing service arm of Alibaba, allowing millions of merchants to take advantage of this tool for one-click digital marketing. Some of the merchants reported increase in ads spend ROI with site-wide advertising ahead of the major sales campaign. 

The Site-wide Advertising essentially is a LLM based smart targeting tools + smart budget control + asset generator, where the machine will learn from product listing's selling points and potential target audience, and manage the spend and exposure to achieve better ads effiency within the platform. It's like an autonomous car taking passangers from point A to point B - while traditionally merchants will be the driver to control the car, but now hand over the steering wheel to the platform. 

Image credit to Alibaba

Alimama's newly release LMA - Large Model for Advertising, which can study customer demands, understand products offer, match demand with supplies, and quickly respond to customer feedback. The model attempts to study the buying intent of the customers, and use multi-modal analysis (image + text + video) to study the product's selling point, ultimately forecasting the best TA segments for the product. However the fundamental structure of TTG has not change - the platform still rely a lot in search scenarios, user's browsing history, product's historical sales and user ratings of the products to make the best forecasts.

Apart from the official tools, Alibaba also attempt to rebuild the merchant side service market allowing third-party AI tools to better assist merchants in creating digital creative assets, while getting subscription revenue. The Service Market is Alibaba's own version of Shopify's App market, and some of the certified app developers can get exclusive access to APIs as an extension to TTG's standard offer to merchants. 

Numerous services and apps can now be found within the Service Market for 30' second video genration, smart clips for livestream sessions, model re-fitting, copy generation, AI clothing trial-on, product shooting, and AI voice-over. Many apps and services offer 7-15 days free trial and has a monthly subscription fee from $5~$30 dollars, very affordable for merchants who are looking for alternative ways to generate assets.

JD.com Bet on Smart Assistance to Relieve Operation Team from Mundane Tasks

JD.com takes a different approach to help merchants when it comes to AI applications. The recently released Jingmai AI Assistant² is a smart assistant that responds to natural language and can assist store's operation team to command and complete tasks. 

In a screenshot provided by JD.com, Jingmai AI can recognize command to query order's shipment status, and quickly respond the order's latest shipping information. While it looks like a small feature, but AI like this can quickly help customer service and ops team reply to customer inquiry and improve overall customer satisfaction. Mundane tasks that can be automated by AI such as uploading and distributing customer invoices, order shipment delay notice, and various small features can reduce manual work and error rates, which in general can improve store's rating and performance.

Jingmai AI also help ops team quickly build sales and marketing plan, as the AI is capable of analyzing store performance data, to provide quick audit and help ops team identify issues that need to be addressed to. While these features are also supported by various chat-based AI tools such as Kimi or Bytedance's Doubao, JD.com pre-trained LLM understands better about platform's functionalities and ecosystem, making it a true assistant for the merchants.

JD.com's CEO Xuran appeared at a Double Eleven Merchant Forum³ recently, saying that the platform "is endeavouring not just to improve customer experience but also merchant's experience with the platform, and to offer merchants tools to gain more traffic, faster operation, better service and at lower costs."

Bytedance Releases Video Generation Text2Video Models Comparable to OpenAI's Sora

On September 24th, Bytedance unveils 2 new video generation models named Doubao-PixelDance and Doubao-Seaweed large language models which will be released next month for all creators. Bytedance is the owner of popular short video apps TikTok and Douyin, and the latter is the no.1 short video app in China and a rising social commerce platform contesting Alibaba, PDD and JD.com. 

Left: Static Image; Right: animated by PixelDance; Image Credit: BUSINESSALERT⁴

PixelDance is capable of producing 10-second videos. The AI video generator uses image and text input, to turn static images into vivid, consistent and realistic video with less errors and better visual quality. For Merchant, using AI to create commercial short video for marketing or product explanation could be easier and less costly. 

A screenshot of the research published by Bytedance

Prior to the release of the application, Bytedance has been researching video generating AI and published an article at CVPR2024, Make Pixels Dance: High-Dynamic Video Generation. As a summary, PixelDance is based on the potential diffusion model, generating video by combining the first and last frame image instructions and text instructions, and effetively using public video data to train the models. 

The model is now accepting enterprise application for trial and will be gradually made public for personal creators. 

Alibaba is also reported⁵ to be working on a video generation tool called Tora, which is based on OpenSora foundational model. 

LiblibAI closed third round of financing in July 2024

For many e-commerce visual creators, LiblibAI is of rising importance to their innovation and inspiration. Started as a community to share pre-trained AI models and knowledge, LiblibAI is actively seeking to commercialize the growing professional user bases, hosting models online, and aims to become the go-to platform for model training and distribution. To some extend, LiblibAI is a Chinese version of HuggingFace and CivitAI. 

LiblibAI's community offers hundreds and thousands of pre-trained Stable Diffusion (1.x~3.x) checkpoints and LoRA, and users can use the built-in WebUI and ComfyUI as interface to create images and videos, which are supported by local data centers. ComfyUI is massively used by Chinese e-commerce companies and independent studios to generate workflows that suits more professional image creation or video generating scenarios. 

One can think of LiblibAI as a marketplace for models. As model training become accessible and cheaper, creators can train and publish their own models or workflows in the marketplace. For merchants, LiblibAI offers a chance to quickly catch up with innovation and trends, without having to start from scratch.

LiblibAI currently has over 10 million professional AI image creators and has produced and distributed over 230 million AI images⁶, covering illustration, anime, industrial design, e-commerce, and more. LiblibAI has an Annual Recurring Revenue of over 1.5 million USD shortly after its half year commercialization. 

Source (please use google translator to read the Chinese reference websites):

1.  Ministry of Commerce: 70 million people in China are engaged in e-commerce work. https://column.iresearch.cn/b/202403/977683.shtml

2. JD.com's Jingmai Assistance. https://mtt.jd.com/article/articleView/811a69f9-e5ad-4853-8205-7f40484925fe.action

3. JD.com Launch JingMai AI. https://finance.eastmoney.com/a/202409253191049032.html

4. Bytedance's PixelDance in beta test. https://www.163.com/dy/article/JCU6VUO70541LYVF.html

5. Bytedance unveils 2 new video generating AI models. https://www.scmp.com/tech/tech-trends/article/3279790/bytedance-unveils-2-new-video-generation-ai-models-narrow-gap-openais-sora

6. LiblibAI closes 3rd round of investment. https://baijiahao.baidu.com/s?id=1806160264543873218&wfr=spider&for=pc