Alibaba Turns a Corner and Continues to Invest in Deep-Learning AI Capabilities

How Alibaba’s AI Investments Revolutionize E-Commerce in China. Alibaba, the world’s largest e-commerce company, is beginning to see the light at the end of the tunnel as consumer confidence slowly returns to Invest in Deep-Learning AI Capabilities after China’s strict Covid-19 crackdown. While it may take some time for the company to reach its full potential, it has already managed to beat expectations by posting a 2% revenue increase to $35.92 billion during the fiscal third quarter ending December 31.

According to CEO Daniel Zhang, merchants are eager to get back in business, and he expects the recovery to continue. However, it’s not surprising that it’s been a slow process, given that 2022 marked one of China’s most sluggish years of economic growth in decades. Chinese consumers have also had to deal with rising infections as lockdowns were lifted, which resulted in suppressed demand during January and February, as Covid continued to spread, and the New Year celebrations disrupted sales.

Nonetheless, the situation has improved, with cases now subsiding and consumer sentiment on the rise, coupled with a readiness of online merchants to deal with demand. These factors bode well for Alibaba’s continued recovery, especially considering that it has 1.3 billion active yearly customers, giving the company vast mines of information to use to optimize the virtual shopping experience.

It’s no wonder that Alibaba has announced it will continue to invest in a large-scale AI deep-learning model that can be trained on large datasets. Not only will this help power its e-commerce arm, but it can also be used to cross-fertilize growth in its cloud business, which lags many of the big global competitors.

Despite Alibaba’s positive outlook, investors may still be wary of how this expansion will be managed, given the company’s past regulatory scrutiny. However, the ongoing investment in AI capabilities is a promising sign that the company is committed to staying ahead of the game and continuing to provide a top-tier e-commerce experience for its customers.

We asked experts at Hargreaves Lansdown for comment on this issue.:

“Alibaba is starting to turn a corner as consumer confidence slowly returns after China’s onerous zero-Covid crackdown, but it’s going to take time before its powering on all cylinders again. Revenues rose 2% during the quarter when restrictions were finally eased. It’s little surprise it’s been slow going given that 2022 marked one of China’s sluggish years of economic growth in decades. Chinese consumers have also had to deal with rising infections as lockdowns were lifted. Demand was still suppressed in January and February as Covid spread and the New Year celebrations also disrupted sales.  But now that cases have subsided, consumer sentiment has risen and the desire to spend is snapping back, which combined with a readiness of online merchants to deal with demand bodes well for Alibaba’s continued recovery, commented Susannah Streeter, head of money and markets, “As the world’s largest e-commerce company, it has 1.3 billion active yearly customers which gives it vast mines of information to use to optimise the virtual shopping experience. It’s little wonder the company has announced it’s continuing to invest in a large-scale AI deep-learning model which can be trained on large datasets. Not only will this help power its e-commerce arm, but this technology  can also be used be to cross-fertilise growth in its cloud business, which lags many of the big global competitors. Investors may still be wary of just how this expansion will be managed, given how Alibaba has already been subject to intense regulatory scrutiny.”