Alibaba plans to up competition with Amazon

May 15, 2019 by
Nico Hoeijmans

Alibaba

The global e-commerce company is allowing retailers from countries other than China to sell goods internationally via its platform. Mother company Alibaba will expand its international services provided by its subsidiary AliExpress to Turkey, Italy, Russia and Spain.

By using the business model of their fast-growing subsidiary, Alibaba will be able to challenge the world’s largest online retail platform Amazon. According to Alibaba’s President of Wholesale Marketplaces, Trudy Dai, AliExpress will make changes that enable retailers from other countries to sell via their platform. The e-commerce business is currently focused on Chinese retailers who sell their products to customers spread over 150 countries.

Ms Dai, who founded Alibaba along with Jack Ma, said: “from the very first day that Alibaba was founded we had a ‘global dream’”. After gaining experience with the initial four countries, AliExpress is planning to roll out the new service (called ‘local to global’) in other countries as well.

According to an executive the new strategy, which only begun this year, has already created a ‘good foundation’ of SMEs that have registered for retail. However, Billy Leung (director at Haitong), explains that AliExpress’s urge to suddenly expand globally is driven by diminishing growth in its home country China.

Amazon has not yet joined the contest for international market share, as penetration rates in the global e-commerce industry are still very low. The US company has recently announced its plan to close its Amazon China this July, due to setbacks on the Chinese market. Online shoppers from China will remain to be able to purchase from Amazon Global.

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