This year's 618 shopping festival, AI helps merchants "do well" in their business

Text | Wang Yi

01. The AI dividend is emerging, but can merchants catch it?

There is no doubt that the 618 Shopping Festival is the business opportunity with the strongest certainty for merchants in the first half of the year.

However, this year's "certainty" has a new meaning. After more than a decade of major promotions, merchants are already extremely familiar with activities such as signing up, stocking up, setting prices, and competing for rankings. The difference is that in the past, doing these things could indeed bring growth and profits. However, as the industry enters the mature stage of competing for high - quality development, simply repeating the same things may lead to growth, but profits may not keep up.

Changes are taking place. On the one hand, merchants' mentality has shifted from "chasing scale" to "seeking efficiency", focusing on real operating profits and long - term brand awareness. On the other hand, AI has begun to truly integrate into specific business chains.

In reality, most merchants' attitude towards AI is "blind excitement": they know it is a trend, but they don't know "where to use it, how to use it, and what changes it can bring".

This is also one of the backgrounds for various platforms to focus on AI. Alimama launched AI Wanxiang in March this year, embedding it as a key capability engine into all its AI products. During the Tmall 618 period, more than one million merchants made over 3 billion calls, making it a large - scale AI exercise for e - commerce platforms.

Finally, there is a batch of samples that can be closely observed to see if AI can really help people do business differently.

02. What exactly has AI changed in e - commerce?

The help that AI provides in e - commerce is more practical than expected. It has changed not only the efficiency of business operations but also the way merchants run their businesses.

Finding a blue ocean in a red ocean

"To be honest, the current beauty industry is extremely competitive. General traffic is getting more and more expensive, and the cost of acquiring new customers is constantly rising. Everyone is promoting anti - wrinkle and firming products. Why should consumers choose yours?" Zheng Que, the Chief External Affairs Officer of Chando, pointed out, "The real problem lies not in advertising but in communication. We need to make sure that consumers understand what we are saying."

Chando's dilemma is a microcosm of the current beauty industry. The anti - aging segment has been highly competitive for several years, and all brands are using the same keywords: anti - wrinkle, firming, and reducing fine lines. Consumers have long suffered from aesthetic fatigue. When the selling points of all brands in the segment are similar, the only way to compete is through price.

Chando's seventh - generation Purple Serum, with its core ingredient Himilink, is in a difficult situation. Objectively speaking, Himilink, a self - developed yeast technology ingredient, is a good one. However, the problem is that consumers don't know what it is and don't care. On the shelves, it has to compete directly with ingredients like Pro-Xylane and Retinol, which have been well - known in the market for years.

In the past advertising logic, brands would define their target audience based on their own understanding. For example, they would set labels such as women over 30 with anti - aging needs and then launch advertising campaigns around keywords like "anti - wrinkle" and "firming".

This logic itself is not wrong, and keyword - based advertising is still a basic operation in e - commerce advertising. However, merchants can only understand what consumers need based on their own knowledge and then select the target audience from existing labels and keywords. In other words, merchants' knowledge determines the boundaries of their business.

The value of AI lies in breaking through these boundaries.

During the 618 period, through Alimama's "Brand New Power WIN" (an AI - based brand growth model launched by Alimama, which helps brands establish a full - domain asset evaluation system, making every step between product promotion and conversion visible and quantifiable), Chando used AI to analyze the real search behavior and content browsing data of consumers across the network. It found that in the anti - aging segment, the most - searched expressions were not "Recommendations for anti - wrinkle and firming serums" but rather scenario - based and emotional questions like "How to rescue a tired face after staying up late" and "Poor skin condition after overtime work".

For example, a 23 - year - old girl who works overtime until late at night every day does have anti - aging needs. However, in the standard e - commerce context, she does not have the "anti - aging" label. Also, those who search for "Can sensitive skin undergo anti - aging treatment" are looking for a gentle way of anti - aging. In the past advertising system, these potential customers were not in the advertising chain, making it difficult for brands to reach them.

In the past e - commerce advertising logic, merchants would first define the demand and then find matching people from a structured label library. This would easily result in a similar pool of people being targeted repeatedly for conversion. AI does the opposite: it first looks at what consumers are really looking for and then infers which products match these needs. It does not rely on pre - defined labels but dynamically establishes the connection between demand and products based on an understanding of consumers' behavior, thus breaking the old path dependence and the boundaries of the target audience.

For example, after a new anti - allergy underwear product was launched, AI helped the brand shift from targeting underwear consumers to targeting consumers interested in anti - allergy skincare, attracting new customers from those who searched for "skin allergy". Another example is an electronic lock merchant. In the past, they only targeted people who were renovating their homes. However, AI found that girls who do manicures need electronic locks more because their long nails make it inconvenient to use keys. AI helps merchants find new customers that they would never have thought of.

It was this ability that helped Chando find a blue ocean in the red ocean, refine the differentiated positioning of "Resilient Skin Anti - Aging", and switch the battlefield to a more precise segment.

More importantly, AI translated this ingredient into a language that consumers can understand.

What is Himilink? Consumers won't search for this term and don't need to know. However, expressions like "First - aid recovery kit for a tired face after staying up late" and "Safe anti - aging solution for sensitive skin" are easy for consumers to understand. The hardcore technological selling points are broken down into benefits that different groups of people can perceive.

Meanwhile, Chando used to face a typical pain point: although it had strong out - of - platform promotion, the conversion path was interrupted when consumers returned to Taobao. Brand New Power WIN helped the brand match the full - domain retargeting ability of ShowMAX (an in - Taobao brand display ad that integrates multiple prime resource positions, allowing users to see brand information as soon as they open Taobao, quickly deepening impressions and accelerating conversion), re - reaching out to consumers who returned from out - of - platform and precisely intercepting customers of competing brands, thus connecting the "promotion - search - purchase" path.

During this year's Mother's Day, the GMV of Chando's Tmall flagship store increased by 30% year - on - year, the number of new customers increased by 70% year - on - year, and the number of new members increased by 14% year - on - year. The growth of new customers and new members means adding new blood and new relationships, which is completely different from the conversion brought about by pure advertising.

Chando also had outstanding results during the 618 period: The popular freeze - dried mask sold out as soon as it was launched, with sales exceeding 10 million yuan. The new seventh - generation Super Anti - Aging Purple Serum won the "No. 1 in the Tmall Facial Serum Category List" and the "No. 1 in the Tmall Anti - Aging Liquid Serum Positive Review List" on its debut. New trending products and popular products in the store contributed 30% of the total sales, optimizing the product structure and reducing the over - reliance on traditional products.

More importantly, Chando's user structure has become more balanced and healthy. During the 618 period, the new customer acquisition rate increased by 8% year - on - year, the repeat purchase rate of old customers increased by 36% year - on - year, and the proportion of 88VIP super members among purchasing customers continued to rise, achieving long - term integrated operations in customer acquisition, retention, and repeat purchase on Tmall.

The same ability can manifest differently for different merchants. Baoshu is a brand run by a craftsman that turns the intangible cultural heritage of Tibetan incense - bead making into modern healing accessories that people can carry around. Wang Yue, the founder, used to think that her products were too niche and had a very narrow audience. The search volume for Tibetan incense beads is relatively small, and according to the traditional keyword - based advertising logic, the growth ceiling was obvious.

However, the inference ability of AI provides a new perspective: People who search for "Hetian jade" may not be looking for jade but for a warm gift; those who search for New Year gifts want culturally - rich souvenirs; and those who search for emotional healing need a ritualistic personal item. AI can identify the completely different motivations behind the same search term, such as gift - giving needs or self - rewards, and then help merchants match different product lines and communication strategies accordingly.

Baoshu's reach has expanded from the small category of "Tibetan incense beads" to much larger circles such as emotional healing, intangible cultural heritage, and oriental aesthetics. This is not an arbitrary expansion of product categories but a cross - circle matching of the target audience based on real demand signals by AI.

A well - known domestic beauty brand and a small workshop specializing in intangible cultural heritage handicrafts are connected by the same ability. The former found a blue - ocean segment in a red - ocean market, while the latter discovered mass demand in a niche category. Regardless of the size of the business, AI can help merchants find new opportunities.

The cost of trial and error has been reduced

Finding the right direction is one thing, but having the courage to invest is another. Especially for small and medium - sized merchants, the word "innovation" sounds good, but there is real financial risk behind every innovation.

Youkela in Yiwu has the deepest understanding. It is a factory that has been deeply involved in the star - projector lamp segment for over 15 years. With about 80 employees, it has become one of the leading players in the projection lamp category. However, in recent years, it has clearly felt that the replacement of popular products is getting faster, and competitors can catch up quickly. Out of every 10 new products launched, 7 may fail.

Children's Day is a crucial node for this industry. For the factory, it means that it must complete the entire process of product selection, testing, stocking, and advertising before the festival, and there is very little room for error.

In the traditional process, one round of testing takes at least two weeks. By the time the results are out, there is not much time left for promotion.

AI has reconstructed the process. Youkela first used the market analysis function of Alimama's Damopan to clearly understand the supply - and - demand pattern of the entire star - projector lamp segment. The system showed an interesting finding: Consumers are not searching for clear - cut keywords like "star - projector lamp" but rather for "What to give as a Children's Day gift", "Birthday gifts that little girls like", and "Bedtime story machines for babies". These actually represent three completely different consumption scenarios. For festival gift - giving, consumers value decency and a sense of surprise; for parent - child interaction, they look for fun and companionship; and for daily sleep, they need a warm and reassuring atmosphere. In the Children's Day gift - giving scenario, there is a strong demand for children's star - projector lamps but a shortage of high - quality supply, presenting a structural growth opportunity.

After determining the direction, Youkela submitted the candidate product styles to AI for testing. Through the upgraded full - station product promotion tool, it automatically matched the full - scenario traffic of search and recommendation, found the core popular products, and automatically adjusted the marketing strategy.

"AI is much faster and more accurate than human judgment," sighed Wei Jun, the founder of Youkela. AI has opened up a new world for him, and the nervousness of being a pioneer has faded in the face of the results: The success rate of new product launches has soared from 30% to 92%, the average daily GMV of new products has increased from a few thousand yuan to more than 20,000 yuan, and the product - testing cycle has been shortened from two weeks to 7 days.

For Baoshu, the trial and error is in content. As a niche category, content promotion is the core driving force. With the AIGC creative ability of AI Wanxiang, this craftsman - run brand can automatically generate promotion videos suitable for different groups of people and different needs, such as gift - giving and science popularization. The content production efficiency has increased by more than five times, greatly reducing the cost of content production.

It is not difficult to find that what AI brings to merchants is to make up for weaknesses and strengthen strengths. With the reduced cost of trial and error, innovation is no longer a high - risk gamble.

03. Those who are the first to try

When looking at these three cases together, some commonalities emerge.

In the past, the growth logic of e - commerce could be simplified to the cycle of "advertising - making sales - more advertising". When traffic became more expensive, merchants would spend more money; when efficiency was low, they would change advertising materials. In essence, they were "renting" growth. However, these merchants who are the first to use AI finally have more possibilities.

Take Baoshu, a relatively small - scale merchant, as an example. In the past, a small team of several people was needed to ensure the basic operation of the store. Now, Wanxiang Zhishi helps merchants find the target audience, Wanxiang Zhipin translates product selling points, Wanxiang Zhizao creates content, and Wanxiang Zhitou automatically optimizes advertising 24/7. The system has lowered the threshold of organizational ability. Small teams or even single - person stores can now run the entire business process that was previously only feasible for large companies.

Another example is a factory - style merchant like Youkela. Due to the lack of mature market research, data analysis, and product insight capabilities, the general business logic is production - driven. They would produce products first and then figure out how to sell them. If they were lucky, they could make a big profit; if not, they would be left with a large inventory. It was somewhat like "depending on the weather for harvest". Now, with AI, the decision - making process has been reversed. They first look at the demand, then conduct verification, and finally increase production, achieving a transformation from experience - driven to data - driven decision - making.

Both the full - process closed - loop operation and data - driven decision - making are long - standing concepts in the industry, or some might say "correct but empty words". Small merchants and factory - style merchants previously did not have these capabilities, but now AI has enabled them to acquire these skills.

"We people from Yiwu value practicality in business. Using AI to understand the market and data to drive advertising can not only increase sales but also create popular products," said Wei Jun.