Alibaba looks to international markets for growth
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Alibaba looks to international markets for growth

Chinese ecommerce powerhouse Alibaba is looking to let sellers from more countries onto its international platform, AliExpress, in a bid to supercharge growth. AliExpress, at the moment, enables Chinese sellers to access markets in more than 150 countries worldwide. Now, it will be opening the doors to sellers of other nationalities – initially, Russia, Turkey, Italy, and Japan. This is a move that will see Alibaba compensate for slowing growth at home with international expansionism – and it will increase the competition between it and the world’s other biggest name in ecommerce: Amazon.

Alibaba’s share price has risen by 23% year to date

15 05 alibaba

Source: Yahoo Finance

Trudy Dai, Alibaba’s president of wholesale marketplaces division, told the Financial Times that this new “local to global” strategy (as AliExpress has called it) “is intimately connected to Alibaba’s broader globalisation strategy.” She also said that a “good foundation” of sellers had already registered from the four countries initially included, and that the company was eyeing expansion into other countries too, once it had gained experience in these markets.

Domestically, Alibaba scored a major win over international rival Amazon when the latter closed its Chinese marketplace. Satish Meena, a senior forecast analyst at Forrester, told reporters: “Amazon in China is very small and it is not growing there as well. So it doesn’t make sense for Amazon to operate in a market where almost 80 per cent share is held between Alibaba, JD and there are other players like Pinduoduo.”

Billy Leung, director at financial advisory firm Haitong, added that Alibaba was trying “to expand globally because they are trying to offset declining growth in China itself,” and that it now required significant growth “from AliExpress and Lazada and other international business.”

Disclosure

Dominion holds Alibaba in its Global Trends Ecommerce Fund.


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