Alibaba to Launch Agentic AI Sourcing Tool for Businesses as European Orders Soar

Alibaba Group Holding Ltd. has introduced a new artificial intelligence (AI)-driven sourcing tool aimed at transforming the way businesses source and evaluate suppliers. This launch comes as Alibaba’s business-to-business (B2B) platform, Alibaba.com, experiences a significant rise in demand from Europe and advances its move into agentic AI technologies, which are AI systems designed to act autonomously on behalf of users [para. 1].

The new tool, called AI Mode, will be rolled out next month and was announced at the company’s CoCreate event in London. AI Mode is designed to automate almost the entire sourcing process on Alibaba.com, from understanding a buyer’s requirements to comparing factories and generating trade documents. This automation intends to increase efficiency and reduce manual work for buyers using the platform [para. 2].

Alibaba.com’s momentum in Europe has been notable. Order volume from Europe surged by 57% year-on-year from April to October, while the number of active suppliers worldwide grew by 50% during the same period [para. 3]. The president of Alibaba.com, Zhang Kuo, attributes this growth not to broader macroeconomic trends but to improved platform matching and localization efforts. These include the introduction of more local payment options, partnering with regional logistics providers, and onboarding more local suppliers [para. 4]. While Zhang did not disclose specific gross merchandise value (GMV) for Europe, he did indicate that European demand now only trails behind the U.S. on the platform. Alibaba’s November 2023 investment in German B2B operator Visable GmbH, its largest overseas deal in five years, underscores Europe’s increasing strategic importance to Alibaba [para. 5].

Alibaba.com, as part of Alibaba International Digital Commerce Group (AIDC), is focusing on deeper AI integration in B2B trade, aiming to attract small and midsize enterprises (SMEs) seeking efficient cross-border sourcing solutions [para. 6]. Many European SMEs, facing economic challenges, are looking for opportunities through digitalization or global expansion, which Alibaba.com supports [para. 7]. Financially, AIDC reported a 19% year-on-year revenue increase to 34.7 billion yuan ($4.9 billion) for the quarter ending June 30, driven mainly by strong cross-border business performance. Losses were narrowed significantly to 59 million yuan from 3.7 billion yuan [para. 8].

Zhang emphasized that B2B sourcing, which often involves complex decisions with over 20 factors considered by buyers, is well-suited for agentic AI, compared to B2C where decisions are typically based on around five factors [para. 10][para. 11]. Alibaba.com’s AI Mode integrates an advanced version of its multimodal search engine, Accio, moving sourcing away from basic keyword searches to AI-led decision processes. This can potentially shorten the sourcing cycle from several weeks to under an hour [para. 12].

AI Mode is also able to identify factories capable of producing customized or non-standard products, addressing global requests for items that aren’t yet available in existing commerce platforms [para. 14]. Buyers can use natural language queries to have the system analyze requirements and match them with suitable suppliers [para. 18].

Longtime merchants, such as sportswear seller Guangzhou Healy Apparel Co. Ltd., report that AI tools have improved their design, marketing, and customer service efficiency, contributing to significant annual growth [para. 20][para. 21][para. 23]. AI-powered tools allow for rapid design prototyping and more cost-effective marketing content production, and automated customer communication bridges time zones [para. 22]. Overall, the integration of agentic AI is intended not only to streamline commerce but also to create a trusted network among buyers and sellers [para. 27].