Amid mounting geopolitical headwinds and an economic slowdown in China, Alibaba (BABA) is looking for ways to spur growth beyond its home market.

For Alibaba.com, the e-commerce giant’s international arm that sells business services, this means attracting more small and medium-sized businesses from around the world to its platform and expanding its supplier base beyond China.

Alibaba on Thursday announced a new AI-powered generative sourcing agent that aims to simplify global trade at its second annual Co-Create event in Las Vegas. The company also launched a co-branded business credit card with Mastercard (MA) that is intended to encourage transactions on Alibaba by providing easier access to capital and additional protections for buyers.

“We are building networks not only on the supply and demand side, but also working with partners to establish a payment network, a logistics network… to enable small and medium-sized enterprises to meet, trade and work (on the platform),” Kuo Zhang, president of Alibaba.com, told Yahoo Finance.

Alibaba’s international trade has become a bright spot for the company as consumers in the domestic market have become increasingly cautious.

Alibaba’s International Digital Commerce Group (AIDC) saw revenue grow 32% year-over-year in the latest quarter, while the company’s overall growth, which includes its China trade, cloud services and logistics businesses, was just 4%.

Alibaba.com, a division of AIDC, connects global business buyers with suppliers who are largely based in China. The United States remains one of its largest markets, accounting for 30% to 40% of total gross merchandise volume, according to Zhang, although the platform is rapidly expanding its international reach.

“Global trade is a $20 trillion business, but digital penetration (right now) is in the single digits,” Zhang said. “We think there’s a lot more potential for growth if we lower the barrier.”

The AI ​​sourcing agent aims to do just that by allowing buyers to connect with one of 200,000 global suppliers using conversational language. The search tool provides real-time translation in addition to details of each supplier and its prices, backed by over a billion product listings already available on the platform.

Supply chain diversification

The latest announcements are part of a broader effort by the platform to diversify beyond China, with lawmakers in the U.S. and Europe considering additional trade barriers for Chinese goods, citing concerns about overcapacity and unfair subsidies.

Former President Donald Trump proposed tariffs of at least 60% on all imports from China, while President Joe Biden has imposed tariffs ranging from 100% to 25% on Chinese electric vehicles, solar cells and steel products.

Any additional taxes will likely weigh on Alibaba, as the company is still heavily exposed to China, with 80% of its suppliers based in the country. Zhang said Alibaba.com is focused on diversifying its supplier base, citing the company’s acquisition of a German business-to-business digital commerce platform last year.

At the same time, China’s small and medium-sized enterprises are increasingly looking to participate in global trade and export goods abroad as the country’s economy continues to stumble, Zhang said. China’s small and medium-sized enterprises are a significant engine of the world’s second-largest economy, accounting for 60% of the country’s GDP.

Zhang pointed to the southern port city of Guangzhou as an example of that growth, highlighting a 30% to 40% increase in Alibaba’s suppliers compared with last year. He said the products sold ranged from consumer goods to industrial machinery.

“Before, it was very difficult for them to understand what the real demand was and how to ship (goods) on time, how to collect money,” Zhang said. “With digitalization, the barrier to participate in global trade is lowering.”

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