Alibaba Bets RMB 3 Billion on Qwen Subsidies to Accelerate Agentic Commerce Ecosystem

Inside Alibaba's AI Shopping Subsidy Campaign

Alibaba's latest Qwen subsidies are a bet on agentic commerce

Adoption was strong during the campaign, but it remains unclear if user behavior will persist after incentives fade.

kr-asia.com

In February 2026, Alibaba announced it would spend up to RMB 3 billion ($433 million) promoting its AI assistant Qwen during the Lunar New Year holiday. The campaign offered users free drinks and coupons when they completed purchases through the app.

Results came immediately. On the first day alone, milk tea and beverage orders reached 10 million, briefly overwhelming the app and forcing Alibaba to pause parts of the promotion. Over six days from February 6 to 11, Qwen recorded more than 120 million consumer orders.

At the same time, Tencent invested RMB 1 billion in Yuanbao and Baidu pledged RMB 500 million, igniting a full-scale "AI chatbot subsidy war" among China's tech giants. ByteDance's Doubao partnered with CCTV's Lunar New Year gala and processed over 1.9 billion AI-related queries.

Not a Subsidy, But a Behavioral Experiment

What distinguishes Alibaba's campaign is its fundamental nature. While Tencent's red packet distributions and ByteDance's TV partnership aimed at growing user counts, Alibaba specifically subsidized the act of purchasing through AI.

In a conventional e-commerce flow, users browse menus, open multiple tabs, and navigate through checkout screens. With Qwen, users can complete the entire journey from product recommendations to ordering and payment through conversation alone. The already-integrated ecosystem of Taobao, Alipay, Fliggy, and Amap supports this experience.

Alibaba increasingly positions Qwen as "an interface sitting on top of shopping, payments, travel, and local services." The long-term revenue model being explored is not just subscription income, but potentially transaction fees from commerce flowing through the AI layer.

User Acquisition Results and Retention Challenges

During the campaign, Qwen ranked first on the iOS App Store free chart for six consecutive days. Roughly half of all orders came from county-level and rural users, and 1.56 million users aged 60 and older made their first online purchase through the app.

However, sustainability remains in question. Before the campaign, Qwen's DAU was under 10 million. It peaked at 30 million during the holiday but still trailed Yuanbao's 50 million and Doubao's 100 million. According to NPR reporting, DAU dropped across all platforms after Lunar New Year, with one user saying he "went right back to using ByteDance's Doubao" after getting his free milk tea from Qwen.

The Warning from Walmart x OpenAI

The challenges facing agentic commerce are not unique to Alibaba. In October 2025, Walmart partnered with OpenAI to launch "Instant Checkout," enabling purchases directly inside ChatGPT. However, Wired reported that conversion rates for products sold directly within the chatbot were three times lower than for products requiring users to click out.

Walmart has since shifted strategy toward embedding its own Sparky chatbot inside ChatGPT and Google Gemini. That said, ChatGPT was reportedly bringing in new customers at about twice the rate of search engines, suggesting real discovery value even where the native checkout layer still needs work.

This case illustrates that whether "completing purchases within a conversation" actually aligns with real consumer behavior remains unproven. Consumers often want to compare options, build bundles, revisit decisions, and exercise more control than a chatbot-native purchase flow allows.

Alibaba's Long-term Strategy: The Road to $100 Billion

Alibaba's subsidy strategy is part of a much larger vision. During the March 2026 earnings call, CEO Eddie Wu set a target of scaling cloud and AI commercial revenue to $100 billion over five years. According to Bloomberg, quarterly profits fell 67%, making AI monetization increasingly urgent.

Cloud revenue grew 36% year-over-year to RMB 43.3 billion ($6.2 billion), and AI product revenue has achieved triple-digit year-over-year growth for 10 consecutive quarters. In March, Alibaba also launched Wukong, an enterprise agentic AI tool, extending its agentic AI strategy across both consumer and business segments.

Implications for E-commerce Businesses

Alibaba's experiment highlights both the potential and limitations of agentic commerce.

Key observations: AI chatbots are proving their value as product discovery channels. Even in the Walmart case, new customer acquisition rates were twice those of search engines. However, completing purchases within the chat interface tends to yield lower conversion rates compared to traditional e-commerce flows.

Practical priorities: Structuring product data and preparing AI-friendly information should be the top focus. When AI agents recommend products, businesses with accurate and well-structured data will be favored. Designing products to be "discoverable by AI" may become the next competitive differentiator.

Conclusion

Alibaba's RMB 3 billion campaign is not merely a user acquisition play. It is a large-scale experiment testing whether a new consumer behavior, having AI handle transactions on your behalf, can actually take hold. The 120 million order figure is impressive, but many challenges remain, including post-subsidy user retention and the conversion issues highlighted by Walmart's experience.

Agentic commerce has become a massive proving ground involving Chinese tech giants Alibaba, ByteDance, and Tencent alongside global players like OpenAI, Google, and Amazon. What will ultimately determine winners is not technological superiority, but how effectively they can change consumer habits.