Following news that Chinese e-commerce giant Alibaba plans to invest US$1.4bn to develop an artificial intelligence (AI) and Internet of Things (IoT) ecosystem that supports its smart speaker, the Tmall Genie;

Oliver Lockett, Thematic Analyst at GlobalData, a leading data and analytics company, offers his view:

“Alibaba’s investment in its smart speaker technology will help the company secure leadership position in China’s ecommerce market. The mass subsidization of smart speakers by China’s tech giants has driven high levels of adoption. It has also begun to shift customer habits towards purchasing products or services via a conversational assistant. Alibaba’s decision to more closely integrate the proprietary AI and IoT technologies of its Tmall Genie smart speakers with the company’s ecommerce ecosystem puts the conglomerate at the forefront of this technological shift.

“Alibaba has invested heavily in AI and IoT over the last few years. Even before this announcement, Alibaba ranked top on the thematic screen of GlobalData’s Ecommerce Sector Scorecard. The company scores a maximum 5 out of 5 for the AI and IoT themes, implying that the company’s positioning in these themes will significantly improve its future performance.

“The latest investment will help consolidate this position by enabling the company to collect more information about its customers, which will then be used to improve content and product recommendations. Greater personalization should drive sales from Alibaba’s extensive range of products and services across areas like entertainment, education, healthcare, and online shopping.”