Author | Chai Xuchen Editor | Zhou Zhiyu Faced with the trend of new energy electrification and the loss of market share under price wars, joint venture car companies have been "Renovating" their famous cars in an attempt to mount a strong counterattack. On May 30, SAIC Volkswagen's Touareg L Pro was launched. The car, which is said to be "the smartest gasoline car", had been preheated for nearly two months prior to its launch. The launch invited representatives from DJI Car and Tencent Travel, as well as the person in charge of iFLYTEK, all of whom attended in person to demonstrate the strength of its smart driving and smart cabin. As a "meritorious model" of SAIC Volkswagen, Touareg has been synonymous with Volkswagen SUVs for the past 15 years and was once the best-selling joint venture SUV. With a monthly sales volume of nearly 20,000 units for a long time, it occupies a 20% share of SAIC Volkswagen. SAIC Volkswagen hopes that the new Touareg will become a disruptor in the current market, from gasoline car intelligence to a stable price system with value-added buyback policy. In the view of Yu Jingmin, Vice President of Sales and Marketing of SAIC Volkswagen, new energy vehicles still have range anxiety and gasoline cars have an advantage that needs no explanation, but the biggest difference between them and electric vehicles lies mainly in their appearance and intelligence. After fulfilling the core needs of contemporary consumers, this once "famous car" seems to be reborn. Thus, from DJI's advanced intelligent driving solution to iFLYTEK's smart cabin voice assistant, this 200,000 yuan-level SUV brings together the strengths of various parties, aiming to break through the industry's perception that gasoline cars are less intelligent than electric vehicles. The launch of the new Touareg marks the beginning of SAIC Volkswagen's counterattack. In a post-event interview, Yu Jingmin mentioned several times that due to external cooperation and the accumulation of joint venture partners, SAIC Volkswagen's technology center is actually ahead of many independent brands, but unfortunately the rhythm is too slow. The company will now accelerate its efforts to catch up and even surpass in electric, hybrid or gasoline cars. Yu Jingmin revealed to Wall Street News that the new Touareg is the first gasoline car product in the Pro series, which is focused on intelligence, and that the Passat and Touareg Pro versions will also be introduced within the year. While polishing its technology, it is also preparing for the intelligence of its A-class cars. A counteroffensive war ignited by a gasoline fueled chariot seems to be brewing rapidly. But to be fair, SAIC Volkswagen's intelligence still lags far behind new forces such as Huawei, Xiaopeng, and Ideal. At the same time, in the current context where BBA is crazy about price cuts and the BMW electric car at over 180,000 yuan is setting a new industry low price, the 236,800 yuan Touareg L Pro seems somewhat out of step and the counterattack is difficult to achieve. In response to the challenge, SAIC Volkswagen has given a three-year 20% discount buyback plan. Users no longer need to worry about the fluctuation of vehicle purchase costs and second-hand car prices. SAIC Volkswagen locks in the difference between the purchase and final selling prices of users' vehicles, in a move to crack the price war. This also buys precious time for SAIC Volkswagen to speed up product and intelligence catch-up. This is the backdrop of the efforts to win back the former "king" of the Chinese car market.

In today's weather is good. Today's weather is good.

Surprisingly, the future of Alipay is deeply tied to several chatbots.

In early September, on this year's fintech forum at the Bund, under the scorching sun, Alipay introduced three AI applications all at once -- "Support Small Treasure", "Ma Xiaocai", and "AI Health Butler", entrusting them with your life, financial management, and medical services.

This means that Alipay has adopted the ChatGPT approach, allowing users to handle matters by simply chatting, turning it into a high-frequency used App platform.

Although Alipay has had billions of users, it has been confined to the role of a payment tool due to its lack of stickiness. As a result, in recent years, when Pinduoduo and Douyin emerged as new forces and inserted themselves into the payment, financial management, and credit industries through massive traffic channels, Alipay helplessly became a bystander.

Ant Group is not satisfied with this. It is determined to completely remove the label of "tool person" from Alipay, "stick" to users with the power of AI, build its own traffic aggregation center, and accurately deliver it to merchants to complete the commercial closed loop. It is important to know that both Pinduoduo and JD.com rely heavily on the WeChat platform for their rapid growth.

Now that the flow dividend has peaked and the moat has been fiercely attacked by unconventional forces, Ant Group, which has been independent for more than ten years, is bound to break away from the Taobao ecosystem and venture out into a larger market.

AI lever

In order to remove the label of a pure payment tool, Alipay has tried various methods in the past few years.

While recruiting users from platforms like Xiaohongshu and Douyin and focusing on social networking, Alipay has often been mocked by users as "chatting on an ATM machine." AI has given Alipay a new opportunity, and it has launched an independent AI application called "Zhi Xiaobao".

Like ChatGPT, this assistant, Zhi Xiaobao, packages the complex ecosystem of Alipay behind the scenes and presents users with a simple conversation window to handle various needs such as ticket booking, ordering food, and getting a ride.

At the press conference, Wang Yifei, the product manager of Alipay's intelligent assistant, used Zhi Xiaobao to order a cup of coffee, simply by giving a voice command, the order can be automatically placed and delivered.

"Some people may criticize Alipay as a Rubik's Cube building," says Wang Yifei. "We hope to use AI to rejuvenate Alipay and become the 'Magic Door' in this Rubik's Cube building."

After more than a decade of development, Alipay, which is used for daily payments and scanning codes, has quietly grown into a super giant app. By exploring its "back door," you can find more than 8,000 functions and over 4 million mini-programs stored in the 'warehouse,' most of which users were previously unaware of.

Using Alipay effectively has unexpectedly become a somewhat challenging task. Li Jun, General Manager of Alipay APP Business Group, stated to Wall Street News that less than 10% of users actually utilize Alipay, with the other 90% remaining hidden behind ordinary users. "Although there are many essential services inside, they may be hard to find. Users often have to search on Xiaohongshu first, following the guides step by step."

The arrival of AI may completely change this awkward situation.

Through Zhi Xiaobao, we can see ant group co., ltd.'s strategic moves - leveraging AI to activate existing 'dormant' resources. In the era of artificial intelligence, this is an exciting opportunity that excites ant group co., ltd., as it aims to tap into the rich resources on the Alipay platform and create a national-level AI application.

Data shows that in China, the monthly active users of AI intelligent assistant products exceed tens of millions, only including products like Douyin Bean Bag and Baidu Wenxin Yiyans. Initially, users may try using AI in daily life, but gradually use it less. Ant Group Co., Ltd. believes that one pain point lies in the fact that AI seems a bit distant from people's lives.

Different from general AI intelligent assistants, ant group co., ltd. has a natural moat. Alipay APP serves as its most basic realization scenario, traffic pool, and data source, forming a huge iceberg of interconnected resources online and offline. Therefore, ant group co., ltd. chooses life, finance, medical - three scenes closest to daily life to reconstruct user's commonly used functions with AI.

As the payment tool behind the Taobao ecosystem, over the past two decades, Alipay has successfully established the scenario awareness of online shopping and using Alipay for payments. In the future, ant group co., ltd. also wants to establish more recognition like 'Look for Ma Xiaocai for financial management' and 'Use Zhi Xiaobao for daily life.'

During the Bund Summit, in addition to Zhi Xiaobao, ant group co., ltd. unveiled AI financial butler 'Ma Xiaocai,' AI health butler, Alipay smart body development platform 'Treasure Box,' network bank 'Cuckoo' system, mobile development platform Ant mPass, and more than 30 other technological products.

Behind every scene is a real social demand, and the process of using AI to meet the "practicality" of the demand is the process of Ant Group's mining in the stock.

"The vitality of AI lies in its application. Ant Group has chosen a development path for AI that is driven by user demand and application scenarios," said Eric Jing, the chairman of Ant Group. "We look forward to AI making everyone's life as convenient as scanning payments. "

From the strategic priority of seizing AI application scenarios, it can be seen that Ant Group is not content to be just a payment "tool," and it is eager to expand the margins with AI.

Growing outward.

An astonishing fact is that the original "Ant," has long grown into an "elephant" encompassing 1.2 billion users and over 80 million merchants.

After completing the basic reform of its financial business in July last year, Ant Group inevitably needs to switch to new power. In Eric Jing's view, technological innovation has become the new driver of the "elephant," which is a prerequisite for the future.

As a result, technological innovation reform led by AI was quickly pushed to the forefront.

Last year, despite a 20% decline in net income for Ant Group, it continued to increase its technology expenses, with a year-on-year growth of 3.6% to 21.19 billion yuan. The majority of this went to AI and the highly related data elements. Eric Jing boldly stated that Ant Group will focus on these two directions for the next ten years. In March of this year, Ant Group announced a new round of organizational structure adjustments, hitting the fast-forward button for advancing the three major strategies of "AI priority" and others.

"At that time, it was not easy for us to set the AI First strategy," said Ant Group CTO He Zhengyu to Wall Street News. He admitted that the company was indeed slower than other manufacturers in reaching a consensus on AI, but has been in full-speed progress since making a determined decision last year.

The transformation of Alipay is an embodiment of Ant's "AI first" strategy. The greater significance lies in Ant's intention to transform itself into a "model room" reshaped by AI and digitization.

Ant not only tells this story for itself, but also for other companies to hear.

In recent years, the global AI revolution and the deep adjustment of the domestic internet industry have occurred simultaneously. As the era of incremental enterprise waves farewell, those who can keep up with the pace of AI-era transformation are more likely to take the lead in the next cycle.

Ant is outputting a grand and efficient blueprint to its industrial partners: as AI continues to penetrate into various aspects of enterprise production and management, the hidden gold mine within the enterprise can also emerge. Everyone has the opportunity to become another Alipay by mining their own potential from within.

In addition to the familiar Alipay, Ant Group also has technology commercialization businesses represented by Ant Financial. It packages its technological accumulation in products such as Alipay and exports them overseas to serve the digital transformation of global customers.

Zhao Wenbiao, CEO of Ant Financial, told Wall Street News, "Many emerging countries and regions in Southeast Asia are currently at a stage of digitalization equivalent to China 5-8 years ago. Moreover, their GDP is developing rapidly, and they urgently need more advanced digitalization experience."

Now, Ant has achieved initial growth in outward expansion.

In the past year, the number of Ant Group's customers has increased by 35% and has been deployed in nearly 90 industry scenarios. Its revenue ranks among the top in the domestic software field. In addition, Ant's cross-border digital payment solution Alipay+ has expanded its "Circle of Friends" to 25, covering more than 1.5 billion domestic and overseas accounts. The OceanBase database business that supported the "November 11" shopping festival also occupies the first market share in the domestic financial industry.

From mining its own resource gold mine to exporting the "technological revolution" as infrastructure for more enterprises' digitization, Ant Group has shed its financial nature and put on the cloak of technology. For Ant Group, this is indeed a safer and more reliable choice.

Venturing out of payments

For Ant Group, the Alipay App is its core asset accumulated in the era of mobile internet, and payment is its first mature business model.

But for the separate Ant Group, the story of payment is no longer sexy, and the external environment is also changing rapidly.

Wang Ziling, the head of Alipay's payment business, revealed to Wall Street News that domestic payment transaction fees are very low. "One-sixth is the list price, and one-third is the actual price. It can't be compared with the average of 2% overseas. Relying solely on payment transaction fees is definitely not enough to survive in China."

Outside the door, Douyin and Pinduoduo are rising up to share Alibaba's business, and the latter, with its huge traffic advantage, has begun to expand its presence in payments, financial management, and credit. Combined with Taotian opening up to WeChat Pay, this puts increased pressure on Alipay.

According to Alibaba's financial report, Ant Group's net income has declined for three consecutive years, from 72.98 billion yuan in 2021 to 23.82 billion yuan last year. And according to the Hurun Research Institute's "2024 Global Unicorn List," Ant Group's valuation has also declined from 2.1 trillion yuan four years ago to the current 570 billion yuan.

When the afterglow of the growth dividend subsides, Ant, which is being swept into the "post-internet era," urgently needs to break out of Alibaba's "greenhouse" and find a new path to scale.

The most direct task that the era has assigned to Ant is to tell a new story beyond payments, to retain users and to protect the merchant base.

On the one hand, "Support Small Loans" and "Ant Small Finance" ride the wave of AI, maximizing the reallocation of user demand and resources by minimizing usage costs. At the same time, Alipay reintroduces its content strategy, successively launching Life Account, launching the Life Channel and live streaming entrance, attempting to counter the "pipeline" pattern with content.

All these attempts to break free from their own limitations actually lead to the same result - Ant and Alipay must decisively shed the role of "payment tool." Before achieving their transformation, the biggest bottleneck they need to overcome is their own past.

Due to the highly consistent service targets of Alipay's various components and the focus on extending services around payments, its identity as a tool has deeply rooted itself in people's minds. Although Alipay's user base does not lag far behind WeChat and TikTok, it ranks at the bottom in terms of average daily usage time per capita (9.4 minutes) among platforms with over 100 million daily active users.

In the eyes of industry insiders, when the price of traffic on various platforms rises, business will migrate to where the cheap traffic is. However, Ant, who cannot retain users, has become a passing guest in the bustling traffic and is unable to truly control its own destiny.

The turning point lies in Ant Group mobilizing its technological advantages and filling the user stickiness gap. This can realize the transformation from being a "payment tool" to a traffic platform, and in turn, construct an entire commercial closed-loop.

The era has shaped Ant and Alipay, and now they want to create a greenhouse era for themselves through AI, content, and international expansion.

With its three strategic focuses on prioritizing AI, the dual engine of Alipay, and accelerating globalization, Ant is gradually refining its grand vision - to become the digital infrastructure for the future service industry and a healthy and growing company for the next 102 years.

As Ant restarts and regains its rhythm, it is better positioned in the competitive environment and has clarified its own positioning and development direction. Its subsidiaries, OceanBase and Ant Financial Services, have also sought external funding to achieve counter-cyclical growth, which is seen as a signal for Ant Group's return to the capital markets by the public.

At this moment, Ant is actively promoting a grand story of a technology platform beyond payments to the outside world. However, whether this transformation will ultimately take shape depends on the market and its users' votes.