Alibaba International's Q3 Performance: Further Increasing Investment in AI to Accelerate Global Market Expansion

[Ebrun Original] On February 7th, Alibaba released its financial report for the third quarter of the 2024 fiscal year. The report data shows that the revenue of Alibaba International's digital business group increased by 44% year-on-year to 28.516 billion yuan; overall orders grew by 24%, largely due to the order growth brought about by the sale of "Choice" products on AliExpress.

Among them, Alibaba International's wholesale business, that is, the revenue of Alibaba.com, reached 5.256 billion yuan, an 8% year-on-year increase. The growth was mainly driven by the increase in value-added service revenue related to cross-border business.

This quarter, Alibaba.com fully utilized "Triple-Arrow" strategy, decisively launching in several crucial global markets, accelerating its expansion, which has become the current main theme:

1. Expanding into new markets: Acquired a European B2B platform, establishing a dual-brand operation in Europe;

2. Pioneering innovative products: Launched AI foreign trade products, swiftly applying the latest technology breakthroughs;

3. Expanding service capabilities: Acquired a large payment institution license in Singapore, further deepening its financial service capabilities. It was also the basis for the semi-managed service launched at the beginning of 2024.

01 Acquired the European B2B Platform Visable, Realizing Dual-Brand Operations

This quarter, Alibaba.com completed the acquisition of Visable, a well-known B2B digital trading platform in Europe.

After the completion of this acquisition, Alibaba.com realized a dual-brand operation in Europe. That is to say, Alibaba.com will continue to increase its investment in Europe, while Visable will maintain independent operation. The two brands will work together to serve European customers.

Publicly available information shows that Visable is one of the world's first B2B trading platforms. It currently has two European B2B online trading platforms, WLW and Europages, covering multiple languages including English and German. Through these two platforms, Visable provides comprehensive business communications and trading services to European customers and has a large number of local supplier resources in Europe. This complements Alibaba.com's existing supplier capabilities.

Currently, the Visable platform is still mainly based on Yellow Pages mode, relatively backward compared to Alibaba.com's existing model. After the acquisition is completed, Alibaba.com will provide comprehensive technical support to Visable to help it "evolve" and improve the user experience.

Based on this, Alibaba.com will open up new markets with a wider range of supplier types. In late October, the Europe Pavilion was officially launched, and investments in the European market were strengthened through more detailed country-specific operations; while Visable attracted new customers with improved user experience. This dual approach will accelerate Alibaba.com's expansion in Europe.

02 First to Launch AI Foreign Trade Products, Order Volume Exceeds Expectations

This quarter, Alibaba.com launched two AI tools in succession. In November, two AI foreign trade products, Business Assistant and OKKI AI, were officially launched. They have intelligent product launches, intelligent reception, intelligent management, and other functions that can provide practical suggestions based on foreign trade scenarios, generate practical materials such as images and videos with one click, and also provide real-time translation, data analysis, and other functions.

The AI Business Assistant is aimed at merchants on the Alibaba.com and is directly embedded in the Alibaba.com merchant backend, while OKKI AI is open to all foreign trade merchants across the industry.

It is reported that these are the earliest AI e-commerce products to integrate with specific industries and form a business model. The products have increased the overseas inquiry volumes of AI-optimized products on the Alibaba by 15%. Currently, the order volume for this series of foreign trade AI products has exceeded expectations.

It is understood that as early as the beginning of the fiscal year, Alibaba.com had already initiated the exploration of AI e-commerce and, according to the actual needs of foreign trade merchants, sought points of integration between AI and the foreign trade industry. By August, Alibaba.com's President, Zhang Kuo, had already demonstrated the various functions of AI foreign trade products at a press conference. Zhang Kuo stated that the industrial application of AI had entered a more challenging period; through continuous iterations and refinement, Alibaba.com hopes to help each merchant create their own small model and truly bring AI models in foreign trade into a new stage. "AI is not just about showing off; it is mainly to solve practical problems for customers."

（Image: Zhang Kuo, President of Alibaba.com, demonstrating the AI foreign trade products at the press conference）

At the beginning of this quarter, this series of practical AI products were quickly made available for internal tests by merchants. The test data showed that the Business Assistant tool can help foreign trade merchants increase their online exposure by about 19%.

In 2023, Alibaba.com's AI tools in product releases, inquiry responses, and data analysis had been comprehensively optimized and will continue to upgrade large model business capabilities; and it is clear that the strategic focus in 2024 will be on AI e-commerce and conducting deterministic work around buyers.

"However, I want to emphasize that the next focus of AI is to improve the buyer's user experience," stated Qin Fen, head of Alibaba.com's Industry and Merchant Business Department, to Ebrun Power. He pointed out that on the buyer's side, there are still a lot of innovative scenarios, and AI will become a real assistant to buyers, helping match suppliers, products, and buyers better, significantly reducing buyers' selection costs. "In 2024 to 2025, this will be a very core strategy."

03 Obtained a Major Payment License in Singapore to Provide Local Payment Services

In addition to overseas acquisitions and product innovation, Alibaba.com's existing foreign trade services were further solidified this quarter.

At the end of December, Alibaba.com obtained in-principle approval from the Monetary Authority of Singapore and will obtain a major payment institution license (MPI) in Singapore.

This is another important license for Alibaba.com's globalized layout of funds. Once the license formally takes effect, Alibaba.com will provide a series of payment services in Singapore, including account opening, local remittances, cross-border remittances, currency exchange, and more.

In fact, as one of the financial centers in the Asia-Pacific region and even globally, Singapore holds an important position in the global fund services market. Being recognized by the Monetary Authority of Singapore means that Alibaba.com's fund services can be further enhanced. Currently, Alibaba.com's cross-border fund services have already provided security for 5 million global inbound remittances.

At the beginning of 2024, Alibaba International continued to expand and was the first to release a semi-managed model in the B2B foreign trade field, using the platform's service capabilities to lower the threshold for businesses to engage in foreign trade.

（Image: Alibaba.com's Semi-Managed Services）

Under the semi-hosted model of Alibaba.com, as long as the merchants have the ability to supply goods and meet the delivery time of 3/7 days, they can use the platform, and the complex processes such as logistics, after-sales, and fund security will be hosted by the platform. A merchant of Alibaba.com told Ebrun that the semi-hosted model does not provide warehousing function, and its main significance lies in product testing and conversion: the traffic support of semi-hosted can bring a large number of small and medium-sized buyers to the merchants. "A large number of small and medium-sized customers, their preferences represent the trend direction, and at the same time, semi-hosted can also be used to cultivate and explore potential customers."

It is reported that the growth rate of GMV of Alibaba.com in 2023 is around 20%, and the growth volume of overseas users exceeds 10%.