The e-commerce giant, Aliexpress, allows businesses from certain countries to sell goods on foreign platforms, as part of its efforts to take US-based Amazon.com, the world’s largest online site that holds third-party vendors.
Aliexpress sells Chinese goods to buyers in 220 countries.
The move to allow foreign traders to sell on AliExpress, a business-to-customer site that traditionally sells Chinese goods to buyers in 220 countries and regions, is part of Alibaba’s broader globalization strategy, according to Dai Shan, president of the wholesale market division Alibaba.
The company has piloted the initiative by allowing small and medium businesses in Russia, Turkey, Italy and Spain to register and sell their products to other countries on the AliExpress network, the company told the China Daily on Monday. Expansion to other markets may be in the pipeline.
“This is our first year ‘local to global’ strategy,” Dai told the Financial Times in an interview published last week. “This strategy is closely related to Alibaba’s broader globalization strategy.”
Last year, AliExpress recorded sales growth of 94 percent. In September, more than 150 million buyers outside of China had purchased items ranging from toys to electronic equipment from Chinese retailers at reasonable prices.
Practice hosting local traders on AliExpress dates back to popular discount events such as November 11 and Black Friday last year, where around 170 Russian and Spanish retailers are promoting their offers on the website, Wang Mingqiang, AliExpress general manager, told China Daily in an interview previous.
“With the introduction of merchandise from various origins to AliExpress, we see more and more high-quality, mid-to-high products sought by customers,” Wang said.
According to the 2018 E-commerce Foundation report, AliExpress is one of the most popular retail applications on all mobile devices in Spain, while one in six Russians has made purchases from the site.
When expanding its global footprint, Alibaba implemented a number of localization strategies to increase influence. This, for example, has utilized leading social media platforms, such as Facebook, Instagram and YouTube, to attract buyers through personalized advertising.
It also formed a joint venture in September with Russian sovereign wealth funds, telecommunications company MegaFon and internet Mail.Ru Group to expand the customer base.
The addition of foreign vendors marks a big step towards scaling up the local e-commerce economy and encouraging consumption, said Wei Hao, head of the department of international trade and economics at Beijing Normal University.
“This step is a radical change in the operating model. Alibaba is on its way from being a Chinese company with international ambitions to global companies with global offers,” he said.
By working with AliExpress, less measurable foreign brands also better understand how Chinese businesses operate, which has the potential to accelerate their entry into the Chinese market, Wei said.
But international e-commerce can also be a difficult business. Amazon has decided to close its Chinese store earlier this year due to intense competition. Meanwhile, China’s online retail market is expected to slow to a 15 percent annual growth rate, according to estimates from consulting firm Mintel, suggesting that people like Alibaba must find new sources of income.