The recent restructuring within Alibaba has set the stage for significant shifts in how the company's AI initiatives, specifically "Tong Yi," will operateOn December 18th, credible reports emerged indicating that "Tong Yi," previously integrated within Alibaba Cloud, is being spun off to join the Alibaba Intelligent Information Business GroupThis strategic move brings together product managers focusing on consumer applications alongside related engineering teams into this new structureMeanwhile, the Tong Yi Lab remains under the umbrella of Alibaba CloudFollowing this realignment, the teams responsible for the Tong Yi PC and app platforms will now work on equal footing with Quark, a prominent intelligent search product within the Alibaba ecosystem.

This transition marks a significant separation of the underlying technology from product application teams, indicating that Alibaba is pivoting to enhance its AI capabilities directed towards consumer use

Wu Jia, the current president of the Intelligent Information Business Group, is expected to take on greater responsibility in steering Alibaba's consumer-facing AI endeavorsGiven the shifting landscape of tech and consumer demand, such rearrangements are become increasingly essential for staying competitive.

At the heart of this change is a broader reorganization within AlibabaWu Jia, a noteworthy member of Alibaba's youthful management team, born in the late 1980s, was recently appointed to handle the Taobao and Tmall user platform business and the Alibaba Mama business unitAs part of this strategic reshuffle announced by CEO Wu Yongming, Wu Jia's role emphasizes the importance of leading teams tackling emerging trends in consumer AI, especially following the integration of diverse e-commerce operations under one umbrella known compellingly as the Alibaba E-commerce Business Group.

A closer examination reveals that the adaptability of "Tong Yi" to the evolving demands and competitive landscape is anything but straightforward

The app, which underwent a rebranding from "Tong Yi Qian Wen" to simply "Tong Yi" in May 2023, faced a significant uphill battle in consumer engagementBy October 2023, the app was officially available across major mobile app markets, but metrics showed it lagging in user engagementFor instance, its daily active users (DAU) and monthly active users (MAU) statistics fell behind trending counterparts such as Doubao and Wenxin Yiyan, ending the year with an alarmingly high uninstall rate of 62%—almost twice that of its competitors.

In light of the broader push towards business-to-consumer (B2C) applications in an increasingly competitive AI landscape, one of Alibaba's critical challenges lies in finding effective footholds for "Tong Yi." While Alibaba Cloud has traditionally focused more on business-to-business (B2B) services, the company's aim in pushing AI applications into the consumer realm means addressing the nuanced expectations and demands of end-users—a feat that represents a substantial hurdle for the juggernaut

Zhang Shule, a noted industry commentator, emphasized that the demarcation between fundamental technology development and the actual application in market settings enables a clearer focusThis separation allows teams to work in a more structured manner, intending to adapt core technologies to meet real market needs, thereby increasing the chances for successful applications.

Alibaba's decision to place Wu Jia at the forefront of "Tong Yi" suggests a strategic move informed by his previous successes, particularly in the incubation of the Quark productOn November 16, 2023, Alibaba announced the first batch of its strategic innovation businesses, including Quark, which was specifically noted for its potential expansive market opportunity and alignment with user trends within the context of the group's "AI-driven" strategyNotably, the majority of Quark's user base—over 50%—is comprised of younger individuals under 25. This demographic focus, alongside a continued emphasis on innovation to cater to young users, has enabled Quark to enjoy remarkable growth and user acquisition.

However, navigating the competitive terrain of AI-generated content (AIGC) applications poses a daunting challenge for "Tong Yi." Reports indicate that over 40% of AIGC applications experienced declines in traffic over the past year, highlighting a troubling trend in user engagement and retention

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Among the remaining 44 apps that managed to achieve consistent monthly growth, a mere 12 demonstrated a remarkable growth rate exceeding 50%, while a significant 34.1% saw a mere trickle of new users, illustrating a disconnection between app utility and user engagement expectations.

The current predicament surrounding AI has led industry analysts like Zhang to identify a prevalent issue: many applications tend to resemble playful gimmicks rather than genuine productivity toolsWhile these applications can enhance certain tasks, their utility often stagnates, resulting in a landscape awash with novelty rather than impactful solutions for users' everyday challengesThis "toyification" phenomenon presents a significant barrier to deeper engagement and broader applicability, ultimately hindering the potential benefits that AI can bring to consumer settings.

As Alibaba positions "Tong Yi" for a consumer-focused future, the company is not merely facing internal restructuring challenges but is also grappling with the complex dynamics of a fast-evolving market environment where user needs must take precedence