AI chatbot behind Alibaba’s $38 billion Single’s Day sales miracle


Increasing customer service demand drives Alibaba toward intelligent customer service

On Nov. 11, 2019, Alibaba scored another blockbuster Singles’ Day shopping festival with RMB 268.4 billion ($38.4 billion) gross merchandise volume, 26% higher than last year’s RMB 213.5 billion. This figure is more than twice the size of Black Friday and Cyber Monday combined.

As the world’s largest e-commerce platform, Alibaba has more than 755 million active consumers, millions of active sellers, generating millions of transactions through various Alibaba promotion tools and services each day. The whole Alibaba ecosystem also involves thousands of e-commerce operation vendors, almost all 3rd party logistics vendors via Cainiao Logistics Network, 1 million offline mom-and-pop shops via Alibaba retail service, and 1.2 billion consumer finance users via Alipay under Ant Financial.

Alibaba traditional relies on its intimate customer service to enable shopping transactions and related post-sales services. The complexity and surge of Alibaba Group’s business results in an increasing challenge to the customer service team. For example, from the 1st Single’s Day shopping festival in 2009 to 2019, total transaction volume grew from 50 million to 268.4 billion, and the number of sellers grew from 27 to 9 million. Given the skyrocketing customer service demand, simply adding customer service staff is obviously not a long-term solution. As Alibaba has already built up one of the world’s most complex customer service systems, intelligent customer service is the only sustainable solution in the future.

Intelligent customer service: AliMe

Alibaba launched AliMe, the artificial intelligence chatbot, on July 24, 2015.

AliMe is an intelligent human-computer interaction (IHCI) based shopping guide and assistant for both sellers and customers. This product is powered by a range of AI technologies such as speech recognition, semantic understanding, personalized recommendations, and deep learning.

Based on the numerous customer transaction data, AliMe can proactively analyze and predict customer service needs and reach out to customers. Based on accumulated data each year, AliMe can have the knowledge base automatically updated in minutes for the first time in the industry and predict the problems each user may encounter in real time. Therefore, AliMe can send users precise service information even before users have even asked for help.

During the Single’s Day shopping festival in 2019, AliMe responded 300 million queries, i.e. 97% of the customer services on Alibaba e-commerce platforms, which accounts for a comparable capacity of 85,000 human service staff. Starting from 2018, AliMe was fully upgraded to provide 4 key services in pre-sales promotion (product recommendation, proactive promotion, intelligent shopping reminder to complete transactions), during-sales and post-sales automatic services (generating invoices, changing address, reminding delivery, appointing logistic vendors), shopping transaction data dashboard for sellers, and intelligent shopping assistant. For instance, AliMe chatbot can understand a customer’s emotion and then prioritize and alert human customer service agents to intervene. It can also remind sellers to increase inventory to keep up with the demand. AliMe has also expanded to Lazada in 2018 in multiple languages to upgrade the whole ecommerce shopping experience in Southeast Asia.

Short-term: establish the AliMe bot platform

In the short term, Alibaba expects to create the AliMe bot patform as a complete set of intelligent human-computer interaction solution as follows.

Face to three domains solutions:

  • AliMe Assistant: platform solution for Alibaba business
  • TiMi: platform solution for mechants of Taobao
  • Bee Bot: platform solution for external enterprises

Supporting two types of infrastructures:

  • SaaS: front to end solution, a whole chatbot system including chat user interface
  • PaaS: supply AI interfaces capability for developers to help build their systems

Long-term: invest in cutting-edge AI technology

Alibaba’s ambition is more than AI application tools. Alibaba established Damo Academy to foster fundamental academic research in AI technology.

Alibaba invested in seven research labs that will focus on artificial intelligence, machine learning, network security, natural language processing and more. In 2018, Alibaba announced to invest more than $15 billion over the next three years in a global research and development program.

Recommendation on next steps:

Alibaba is able to expand the intelligent customer service robot outside of its e-commerce platform. Since Alibaba also invested in the leading social media (Weibo), the leading video streaming website (Youku), the leading payment tool (Alipay), and millions of offline retailers, Alibaba is able to connect all the touch points along the whole customer journey.

Important open question:

As the internet giant with data across all aspects of individuals, to what extent can Alibaba utilize its knowledge of individual data for commercial purposes in reality? Given increasing debate and government regulations over data privacy, how to balance the eager and ability to make more money versus the corporate responsibility in respect to human privacy?

 

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3 thoughts on “AI chatbot behind Alibaba’s $38 billion Single’s Day sales miracle

  1. Very compelling article, as AI and chat-bots are destined to change our lives forever. Besides the use-cases mentioned in the article, it could be interesting to explore the impact of these technology on advertising. In fact, while today consumers still ‘decide’ what to buy, in the future they may completely outsource this task to recommendation engines integrated with a chat-bot that collects our interests or requirements. In this case, machines will collect data and make decisions on our behalf – in the long term this could bring ‘branding’ to an end, by making purchase much more rational and timely. This could be a very interesting application to explore, both for advertisers and for AI/chat-bot companies.

  2. Great to learn about the chatbot! For your open question, I think in China, it takes a long time to bring individual data privacy into priority. The gov wants more personal data. Most people don’t care about give up some privacy for convenience.

  3. Great article! While most chatbots are usually directed towards consumer services, it’s great to see that Alibaba rolled one out for suppliers and partners, especially since they are a marketplace platform. Small and medium businesses in the long tail are often playing catch up when it comes to cutting edge technology, but this is a great way for SMB education in terms of big data and analytics. If they’re smart, they’ll learn how to use analytics for their own businesses, or else Alibaba has just increased their dominance and dependence as a major sales channel.

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