What's Going On With Alibaba Stock Thursday?

Alibaba Group Holding Ltd BABA stock is trading higher Thursday amid reports that its central e-commerce unit, the Taobao and Tmall Group (TTG), is beta testing new AI tools for merchants on its Chinese online shopping sites. The stock is trading higher, close to 2% premarket.

This initiative, the first significant move since a leadership reshuffle in December, was announced at a recent sellers’ conference in Hangzhou. 

TTG aims to enhance seller-consumer interaction by employing AI models to upgrade Dianxiaomi, a customer service chatbot, SCMP reports.

This upgrade will improve services in pre-and post-sales, data analysis, and online sales activities. 

The improved Dianxiaomi, currently in tests with selected sellers, will be available to all merchants by June, boasting an 85% accuracy rate in response time.

These developments at TTG are part of Alibaba’s strategy to stay competitive against domestic rivals like JD.com Inc JD and emerging platforms such as PDD Holdings Inc PDD Pinduoduo and Bytedance’s Douyin. 

Adopting AI tools underlines TTG’s commitment to innovation under the leadership of new CEO Eddie Wu Yongming. In addition to these AI advancements, TTG plans to increase “quality merchants” exposure on its platform and has introduced a new rating system focusing on consumer service indicators.

This move follows Alibaba.com’s November announcement of a new AI tool to help wholesale merchants manage client operations internationally. 

The changes, including a new “refund only” policy, enhance consumer services and boost the repurchase rate, which is significantly higher for five-star-rated sellers than lower-rated ones.

Alibaba drives shareholder value by channeling developments across its various segments.

For instance, Alibaba’s logistics arm, Cainiao, is introducing a new service in the U.S. to consolidate multiple purchases into one package, aiming to reduce delivery times to as little as five days. 

This service, designed for Chinese consumers and students in the U.S., offers more efficient and cost-effective shipping options. 

Cainiao has also managed a record 1.5 billion cross-border e-commerce parcel deliveries last year, contributing to China’s milestone of delivering 120 billion parcels this year. 

Additionally, Alibaba’s DingTalk has launched an updated workplace collaboration app with an AI agent function, enhancing workflow and positioning itself as a leader in integrating AI into productivity tools.

Chinese stocks experienced a significant rally on Thursday, driven by expectations of policy easing by the central bank. 

Market strategist Redmond Wong of Saxo Capital Markets HK Ltd. described this as a retracement rather than a directional shift, advising investors to wait for a more opportune moment to enter the market, Bloomberg reports. 

This market movement coincided with global equities’ positive trend and anticipation of U.S. inflation data, which could influence the Federal Reserve’s interest rate decisions.

Earlier in the week, a top official from China’s central bank indicated readiness to maintain a loose policy by reducing reserve requirements for banks. Additionally, the People's Bank of China countered recent yuan weakness by setting its daily reference rate with a significant deviation from estimates, the largest since November.

Alibaba stock lost 38% last year as it battled intense competition, a management and organizational restructuring, including shelving its Cloud initial public offering as China went softer on its domestic regulatory attack against the key influential tech giants. 

Meanwhile, the broader indexes SPDR S&P 500 (SPY) gained 20.5%, and IShares China Large-Cap ETF FXI lost 30%.

Price Action: BABA shares traded higher by 0.53% at $71.59 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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