Published on: May 20, 2025 / Update from: May 20, 2025 - Author: Konrad Wolfenstein
Alibaba and the AI transformation: How artificial intelligence increases e-commerce sales of the tech giant massively-picture: Xpert.digital
How alibaba transforms e-commerce with AI integration
Record growth by AI: Alibaba's track record in the quarterly report
The recent quarterly results of Alibaba impressively demonstrate how the Chinese e-commerce giant was significantly increased by consistent AI integration. The AI-based marketing tools and platforms, which led to impressive conversion rate increases of up to 35%, are particularly noteworthy. In the cloud area, the company recorded growth of 18%, while AI-related products achieved three-digit growth rates in the seventh quarter in a row. With an announced investment of 48.6 billion euros in AI and cloud infrastructure for the next three years, Alibaba underlines his claim to further expand technology leadership in e-commerce and cloud segment.
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The AI strategy as a growth driver
Alibabas strategic realignment under the motto “User First, Ai-Drives” already shows remarkable results. In the fourth quarter of the fiscal year 2025, the group was able to increase its sales by $ 7% to $ 32.6 billion, while the non-GAAP profit per ADS climbed by impressive 23% to $ 1.73 and thus exceeded the analyst expectations by almost 17%.
The focus on artificial intelligence now penetrates all business areas of the company. CEO Eddie Wu emphasizes the central role of AI-based product innovations for corporate growth. The strategy aims to develop Artificial General Intelligence (AGI) and thus open up new application scenarios that go far beyond today's possibilities when it comes to the accommodation and search.
Alibaba has made this consistent focus on AI technologies a leading provider in the field of cloud computing and artificial intelligence. The current quarterly figures confirm that the company successfully underpins its global leadership claim.
AI infrastructure as the basis of success
Alibaba is massively investing in its AI infrastructure. For the next three years, the group is planning expenses of 380 billion yuan (48.6 billion euros) for AI and cloud computing - more than in the past ten years. These investments have already paid off: the Cloud Intelligence Group recorded sales growth of 18%in the reporting quarter.
Even more impressive: sales with AI-related products grew in the seventh quarter in a row in the three-digit percentage range. Cloud sales rose to 30.1 billion Yuan, which corresponds to an increase of 18% compared to the previous year. This positive development is likely to stop and further increase the interest of investors in the stock.
Revolutionary AI tools in action
Quanzlantui: AI-supported marketing with strong results
The AI-based marketing tool Quanzhannui, which made Alibaba in full in August 2024, is particularly successful. It is used by dealers on the e-commerce platforms Taobao and Tmall and already led to an increase in the average amount of gross (GMV) by 66% compared to the previous day.
On the first day of the Singles' Day 2024, over 250,000 dealers used Quanzhanntui for more than 1.3 million products. The effectiveness of the tool is also evident in marketing sales: the so-called “Customer Management” increases in the reporting quarter to almost $ 10 billion. This is partly due to the increased use of the AI tool, which improves the marketing infectiveness of the dealers.
Accio: AI revolution in B2B trading
With Accio, Alibaba has developed a AI-based B2B search engine that was able to win more than one million users from small and medium-sized companies (SME) within just five months. The “Accio Inspiration” feature increased the conversion rate by impressive 30%.
Accio is based on the open source language model Qwen and uses Reasoning models that have been optimized with real industry data. The platform cataloged millions of suppliers into over 7,600 product categories and was trained with more than 200 million industry -specific parameters. With the new functions “Business Research” and “Deep Search”, Accio offers AI-based solutions for market entry and global procurement that provide SMEs significant competitive advantages.
Personalized recommendation systems increase the conversion rate
Alibabas AI-based recommendation systems have fundamentally changed the way customers discover products. The personalized shopping recommendations led to an increase in the conversion rate by 35%.
Internal tests showed that some AI applications, such as those who help sellers to communicate in foreign languages, led to a 30%increase in orders for dealers. In the meantime, around 500,000 sellers use these AI tools that support tasks such as creating marketing materials, the selection of goods, interaction with customers and the negotiation of reimbursements.
Financial effects and core business
E-commerce as a solid basis
Despite the impressive AI initiatives, the e-commerce business remains the heart of Alibaba. The Taobao and Tmall Group increased its customer management sales by 12%in the reporting quarter. Sales in Chinese retail amounted to 95.581 billion RMB ($ 13.171 billion) in quarter until the end of March 2025, an increase of 8% compared to the previous year.
Other reports even mention an increase in sales from 9% to 101.4 billion Yuan. These positive numbers reflect the effects of investments in the user experience and effective monetization.
International expansion and AI as a growth driver
The international e-commerce business, which is the fastest growing division of the company, is particularly remarkable. In the last five quarters, this area has recorded the strongest growth. In the quarter until March 2025, sales increased by 45% in the year.
The international expansion is supported by the use of AI technologies. This is particularly important at a time when domestic growth becomes slower and competition increases.
Innovative AI models as future technologies
QWen3: The next generation of the language models
On April 29, 2025, Alibaba QWen3 presented the next generation of his open source language models. Experts see this as a further breakthrough in the booming open source AI sector of China.
QWEN3 promises improvements in logical conclusions, when following instructions, using tools and multilingual tasks. The LLM series comprises eight versions with different architectures and sizes, which offers developers flexibility when using AI applications.
Alibaba's introduction to so-called “hybrid models”, which combine traditional LLM skills with advanced, dynamic thinking, is particularly interesting. These models can seamlessly switch between a “mode of thinking” for complex tasks such as programming and a “non-thought mode” for faster, more general answers.
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Zerosearch: AI training in simulation
Another innovative project is zerosearch, a procedure developed by the Alibaba research laboratory Tongyi. It enables the training of large voice models for search tasks without access to real web search.
Instead of using a real web search during training, the search process is simulated by a second language model. This method is not only cheaper, but also better controllable and more technically scalable than conventional approaches.
Market leadership through innovation: Alibabas investments explained
Investments in the future
Alibaba plans to invest 380 billion yuan (around 48.6 billion euros) in AI and cloud computing in the next three years. This sum exceeds the total expenditure of the past ten years for AI and cloud and underlines the company's determination to consolidate its position as a global technology leader.
The combination of cloud and AI sees Alibaba as a long -term growth driver. The company wants to further develop its cloud computing and AI infrastructure and expand its role as a global cloud provider.
Market opportunities and competitive advantages
A recently carried out survey by Alibaba.com among more than 4,000 decision -makers from the USA, Great Britain, Germany and France showed that almost 64% of the respondents plan to integrate AI into their procurement strategies this year. The main motifs are long-term corporate growth, efficiency increases and cost reductions-areas in which Alibaba is well positioned with its AI tools such as Accio.
Despite the current challenges, especially the economically difficult situation in China and the trade dispute with the USA, Alibaba remains an important player in the global e-commerce market. The strategic investments in AI and cloud computing could lead to a stronger market position in the long term, which continues to make the company attractive to investors.
AI as the key to sustainable success
The impressive results clearly show that alibabas massive investments in AI technologies pay off and lead to a significant increase in sales. The AI-based tools such as Quanzhannui, Accio and the personalized recommendation systems offer retailers and customers equally added value and contribute significantly to corporate growth.
With the strategic focus on “user first, AI-drives” and the planned billion dollar investments in AI and cloud infrastructure, Alibaba is excellently positioned in order to advance the digital transformation of global trade and to further strengthen its position as a leading technology group.
The combination of solid quarterly figures, innovative AI technologies and a clear future vision indicates that Alibaba is on the best way to further expand the technological lead over its competitors and to benefit from the enormous growth opportunities in the field of artificial intelligence in the long term.
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