How Alibaba, ByteDance & Tencent Are Rewiring Commerce

A new competitive landscape has been created in the area of artificial intelligence based-commerce where the most influential Chinese tech giants are competing to make chatbots into full-scale shopping and payment platforms, effectively establishing a new front in the artificial intelligence supremacy battle around the world.

How Alibaba is wiring Qwen into Commerce

Alibaba has reformatted its Qwen artificial-intelligence application so that users can search, compare offers, book flights or order food and pay through Alipay all through a single user interface. 

The company is also incorporating Taobao, Fliggy, and Amap with Qwen thus expanding such services to a pilot group with about 100 million users. Shaochen Wang, a research analyst at Counterpoint Research, referring to stronger long-term user engagement.

The agentic transformation of commercial services enables the maximal integration of user services and enhances user stickiness.

ByteDance and Tencent step on the gas

By connecting its Doubao AI helper to Douyin by e-commerce capabilities, the latter has made its autonomous management of customer activities, including tickets booking, available to the billion-user short-video and shopping eco-system in China. 

Doubao has around 172 million active users now, which is enough to offer ByteDance a large channel with which to scale up AI-enhanced in-app purchases. 

In the meantime, Tencent, which uses its WeChat platform to cater to more than 1 billion users, has hinted that AI agents will form a fundamental component of the mini programs, payment solutions, and logistics of the future.

Data, regulation and the China US split

Chinese platforms are able to deploy cross-service applications more quickly than their U.S. counterparts, who are still constrained by the fragmented data ecosystem and have stringent privacy laws, thanks to the advantages of closely decoupled super-applications and rich behavioral information.

Whereas U.S. companies still dominate the frontline of the most advanced models, they are losing out on combining these models into integrated shopping experiences; McKinsey projects that roughly half of shoppers are already using AI to search the web and AI agents would create over $2.9 trillion worth of value in U.S. firms by 2030.

What comes next ?

According to industry experts, the main risk is that the automation process has been overextended, especially in light of the recent backlash on some Function Doubao operation (ByteDance created Doubao, a multimodal AI assistant that can comprehend and produce text,  images, audio, and video) due to privacy and security concerns. 

The ability of AI agents to gain consumer trust depends on how they demonstrate their actions with regards to data utilization, derivation of discount, and creation of recommendations, marking why user opt-outs and a clear audit trajectory have the potential to enhance successful adoption. 

In the next few years, analysts believe that China will have institutionalized its domestic integrations but will selectively roll out the tech overseas, U.S. actors will focus on institutional governance and growing global merchant networks and thus will reap most of the estimated trillion-dollar upside.