Summary of Key Points
Han Xinyi, CEO of Ant Group, predicts that the intelligent agent business will experience a surge in the next 6 to 12 months. Intelligent agents will act as a “new intermediary” between users and merchants, activating niche demands and transforming how value is distributed. Alipay has already launched a full-stack intelligent agent platform and cross-device connectivity protocols, collaborating with multiple companies to build an ecosystem. WeChat Pay and other platforms are also making moves in AI-powered payments, but the industry is still in its early stages. Challenges such as user retention rates after subsidies end, merchant profitability, ecosystem interoperability, and risk management systems need to be addressed before a true breakthrough can be achieved. To achieve this, intelligent agents must provide irreplaceable value for users, generate tangible benefits for merchants, and have a fully integrated ecosystem.
The Logic Behind the Surge in Intelligent Agent Business: New Intermediaries Transforming the Market
Intelligent agents are not just “robotic customer services”; they are super intermediaries that:
- Activate niche demands: They can identify and meet specific needs (e.g., delivering hot milk to your doorstep at 3 a.m.) based on user habits and weather conditions, turning previously unseen opportunities into profitable transactions.
- Reallocate value: The focus has shifted from securing high visibility on app home screens (e.g., more space) to providing deeper understanding of users’ unexpressed needs and better fulfillment quality. For example, a coffee shop that can accurately recommend a low-sugar latte with a breakfast pack has a competitive advantage over ones that rely solely on advertising.
Alipay’s Intelligent Agent Infrastructure: Building a Platform for Partners
Alipay aims to become the provider of essential infrastructure for the intelligent agent business:
- Full-stack platform: It offers merchants a ready-made AI toolkit, allowing them to create their own intelligent assistants (e.g., a restaurant’s agent that can automatically take orders and recommend dishes).
- Cross-device connectivity: Its “Abao” intelligent agent is compatible with devices from Huawei, OPPO, and other smartphone brands, as well as cars from BYD and Geely. For instance, you can use it to order coffee and pay directly through the car’s infotainment system.
- Open protocols: Alipay has collaborated with companies like Qianwen and Huawei to develop the “AHA protocol,” enabling different intelligent agents to communicate with each other (e.g., a Honor phone’s agent can access Alipay’s payment services).
The Transition of Payment Providers from “Back-end Tools” to “Front-end Participants”
Traditional payments were merely tools for collecting fees, leading to competitive pricing. Now, intelligent agents are moving to a more proactive role:
- Involving in the entire decision-making process: They help users find and compare products (e.g., recommending a low-sugar latte with a breakfast pack) and handle the payment.
- Breaking out of the fee-based model: By understanding user behavior, payment providers can offer additional services (e.g., targeted marketing for merchants), rather than relying solely on transaction fees. WeChat Pay is also testing AI-powered cards to compete in this new market segment.
Early Challenges: Retention and Profitability
The intelligent agent business is still in its early stages, facing several challenges:
- User retention: Alipay’s subsidies increased AI transaction volumes by 300 million during the Spring Festival, but without them, user data stagnated. Long-term engagement is crucial, so Alipay is focusing on improving retention rates and the willingness of users to bind their intelligent agents to their devices.
- Merchant motivation: If merchants don’t see significant increases in orders or cost savings, they may abandon the technology. For example, a small restaurant might find the additional AI service costs outweigh any benefits.
- Ecosystem barriers: Different intelligent agents often do not interact with each other (e.g., WeChat’s agents cannot use Alipay’s services), creating isolated user experiences. Additionally, issues like security (e.g., potential fraud) and after-sales support (e.g., where to seek assistance for recommended products) remain unresolved.
The Way Forward: Creating a Viable Business
For the intelligent agent business to take off, three key issues need to be addressed:
- User value: Provide irreplaceable services that truly save time and solve problems for users (e.g., automatically filtering out allergens from food orders).
- Merchant profitability: Show clear benefits, such as increased orders or reduced costs.
- Ecosystem integration: Ensure seamless interaction between different intelligent agents and improve AI models to avoid misunderstandings (e.g., accurately interpreting user preferences).
In summary, the potential of the intelligent agent business is enormous, but it’s still in the process of being established. Only by aligning users, merchants, technology, and the ecosystem can we witness a real breakthrough.