Can Gen AI revitalize Singles’ Day?

As anticipation builds for Singles’ Day 2024 — the world’s biggest shopping festival on November 11, which originated in China — generative AI is set to play a central role in the retail bonanza. The shopping event, which pulled in an estimated $156 billion last year, offers brands a chance to revitalize China’s cooling retail market. New insights from Bain & Co suggest that merchants leveraging Gen AI could outpace their competitors and enhance profitability even further. From buzz to backbone Generative AI made its Singles’ Day debut last year when Alibaba’s Taobao introduced Wenwen, an AI chatbot designed to offer shoppers personalized guidance, including navigation tips for the day’s extensive discounts. While platforms like Taobao were still fine-tuning their AI capabilities just weeks before 2023’s Singles’ Day, this year, generative AI is expected to become less of a novelty and more of a functional asset. According to Bain & Co, generative AI tools are gaining significant traction, especially among Gen Z, with 23% of young shoppers using these tools in the past six months. Across all age groups, Chinese consumers are gravitating toward generative AI in areas like visual search, customer service chatbots, and voice-activated shopping. Local e-commerce retailers are proving even keener on the tech than Gen Z shoppers, with 52% of surveyed sellers already integrating at least one AI-enabled tool. Over half report using AI-powered customer service chatbots, while around a third leverage AI for content creation. Notably, these early adopters are seeing tangible benefits, with most citing moderate to high gains in sales, operational efficiencies, and productivity. Polishing up With generative AI poised to play a more prominent role in this year’s Singles’ Day, brands are sharpening their AI tools and channeling investment in domestic tech startups. Bain & Co’s study highlights JD.com as a prime example. In March, the retail giant introduced an expanded suite of AI-powered tools aimed at slashing merchants’ operational costs by up to 50%. Among the innovations are a virtual assistant to fast-track store setups, alongside an avatar generator for 24/7 interactive livestream shopping. JD.com founder Richard Liu even appeared as a lifelike AI-driven virtual host, complete with his Suqian accent and signature gestures, reinforcing the technology’s personal touch. Tech giant Alibaba has similarly doubled down on generative AI, channeling approximately $800 million in its 2024 fiscal year into Moonshot AI, the company behind the Kimi chatbot. Since 2023, nearly 40% of Alibaba’s investments have centered on AI, according to Bain & Co. Boosting engagement, sales As China’s economy cools, its shopping festivals are feeling the pinch. June’s 618 festival posted underwhelming results, with GMV falling 7%, according to retail data provider Syntun, despite steep discounts. With domestic shoppers pulling back on discretionary spending, brands are turning to generative AI to reinvigorate customer retention efforts and regain their spending power. Deploying generative AI tools could enable homegrown retailers to reclaim their market position – especially in the beauty sector, where foreign brands are overtaking local sellers. Tmall’s initial data release on October 14 revealed that only five domestic brands currently hold the top spots in Tmall’s Singles’ Day presales beauty rankings, down from 10 last year. SEO-optimized product pages, AI-written review summaries, and virtual try-ons like Taobao’s AI fitting room are among the key generative AI tools brands can use to boost sales and deepen customer loyalty.

Can Gen AI revitalize Singles’ Day?

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Published November 03, 2024

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Can Gen AI revitalize Singles’ Day?