Alibaba Group Holding Ltd. has announced that it will be making "historic" investments in its Taobao shopping app, following the recent restructuring that has allowed six new units to raise funds and seek listings independently. The focus for the subsidiary will be on content creation, as a way to attract more users to the platform, and also on launching artificial intelligence-powered tools for merchants, according to Trudy Dai, CEO of the newly spun-off Taobao Tmall Commerce Group.
Dai emphasized the importance of scaling up the user base for the benefit of merchants, saying that the company will make huge investments to achieve this goal. "We will drive content creation in all areas, with much larger investment in content than ever before," she said at a conference last Wednesday.
The move towards content creation is likely in response to the growing popularity of short-video and livestreaming platforms, such as ByteDance Ltd.'s Douyin, which are increasingly entering the e-commerce space. Alibaba faces pressure to deliver a similar experience as young people buy more goods they see on video.
In addition to content creation, Taobao will also make "timely adjustments" to its platform fees and commission rates to benefit merchants. They will also be provided with an expanding suite of free smart operation tools.
The announcement comes ahead of Alibaba's first-quarter results on Thursday, with analysts estimating a sub-3% sales increase as the industry grapples with China's uneven post-pandemic recovery and the lingering impact of Beijing's crackdown on Big Tech. As the country's online commerce leader, Alibaba underwent an historic overhaul in March that paves the way for its units from cloud, logistics, and e-commerce to debut on public markets.
CEO Daniel Zhang said at the time that the company would consider gradually giving up control of some of the units, and there have already been preparations for initial public offerings in Hong Kong for the logistics arm, Cainiao Network Technology Co., and its grocery chain, Freshippo. The group's international online shopping unit has also been said to be in the early stages of exploring a US public listing.
As with other tech leaders in China, Alibaba has made AI development a priority, with a flurry of investments and talent entering the burgeoning sector. The company has said it expects to incorporate its large language model, Tongyi Qianwen, into all its products and services in the near future, even as Beijing's regulators have signaled it will mandate a security review of generative AI services before they can be put into operation.