Alibaba is opening up its AliExpress platform into a full international service which will be able to go head-to-head with Amazon. The huge Chinese corporate group has always wanted to be a fully global player.
AliExpress is about to become a fully global player, allowing retailers to sell on the platform no matter where they come from. This will really take a chunk of business away from Amazon, especially for customers that need items at a good price at the expense of quality. To launch the initiative, small and medium-sized companies in Russia, Turkey, Italy and Spain will be able to register and sell their products to other countries via the AliExpress network, says a report by Financial Times.
Local To Global
AliExpress sells Chinese goods from Chinese retailers to customers in over 150 countries. Opening the platform up to the aforementioned countries is part of their original vision. Trudy Dai, who was part of Alibaba's first executive team way back in 1999, said, "From the very first day that Alibaba was founded we had a 'global dream'. This year is the first year for our 'local to global' strategy. This strategy is intimately connected to Alibaba's broader globalization strategy."
Wilting Growth At Home
Alibaba is expanding overseas, because growth in their home market of China is slowing. Billy Leung, a director at brokerage Haitong stated, “We are seeing Alibaba trying to expand globally because they are trying to offset declining growth in China itself. They are at the point when they need a lot of growth to come from AliExpress and Lazada and other international businesses.”
AliExpress has been performing wonderfully for Alibaba, contributing to revenue growth of 94% in the 2018 financial year for the company's international e-commerce retail businesses. Competing with Amazon needs a bit more time to develop into a fight for international market share. Because penetration rates in global e-commerce remain low (especially in the developing world), the priority will be to lay foundations for growth in expanding markets.
Amazon In Trouble
In China itself, Amazon has been having some difficulties. They even had to close their Amazon China store in July, just 15 years after having opened it. Chinese customers will still be able to shop Amazon at Amazon's global store.
As Alibaba expands its international footprint, it is also implementing a number of different localization strategies aimed at building up customer bases. Sometimes the partners involved are extremely well-connected politically.