Alibaba's AliExpress steps up investment in Spain and South Korea as China's e-commerce players look for growth overseas
E-commerce giant Alibaba Group Holding is continuing to expand overseas along with its Chinese peers, as companies look to offset slowing growth at home and bring their technology to new markets.
AliExpress, a retail service launched in 2010 that offers products to international buyers, is targeting growth in Europe and South Korea. The unit held an AliExpress Choice service launch event on Thursday in Spain, where it has been providing a nine-day delivery time for users since the beginning of March.
AliExpress will run as many as nine charter flights per week to Spain, the most among its EU markets aside from Belgium, which is the logistics hub for AliExpress in Europe. It also plans to increase the number of its pick-up points in Spain from the current 5,000 to 7,500 by the end of March.
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Gary Topp, AliExpress's commercial director for Europe, said in an interview with the Post that the company has been "really focused on the basics" in the past year, making sure "they have the widest selection of products in the market", to compete with other peers that "specialise in a certain category".
"We'll be investing a lot in the user experience, including logistics, also free returns, paying by instalments, product selection and quality, and guaranteed prices," said Topp. "This is really our main direction for the year ... retail basics."
AliExpress said it will invest 100 billion South Korean won (US$76.2 million) in South Korea this year to improve logistics, the user experience and price-performance ratio of its products. Its daily active users in the country increased by more than 60 per cent year-on-year last month, according to Ray Zhang, AliExpress South Korea general manager.
AliExpress' expansion in Korea and Spain is in line with moves by its competitors. Temu, the Boston-based budget shopping app owned by PDD Holdings, has accelerated its expansion into new markets including Canada, Australia, and New Zealand since achieving early success in the US. TikTok, the short video app owned by ByteDance, has also been testing the e-commerce waters in the UK and the US despite some political hostility.
Topp said Spain is a priority for AliExpress in Europe. In February, orders in the country rose by 89 per cent year-on-year in the kitchenware category and 44 per cent year-on-year in the household goods and cleaning category, according to the company.
The top five product categories in Spain are home and decor, consumer electronics, auto and motorcycle parts, mobile phone accessories, and sports equipment.
Mark Tanner, managing director of Shanghai-based consultancy China Skinny, said AliExpress chooses markets like Spain as "they are less contested than markets such as the US, particularly for lower cost Chinese cross-border goods".
In its latest financial report, Alibaba noted that a decline in AliExpress orders had continued to narrow compared to prior quarters. It also said that the cross-border delivery lead time had significantly improved in strategic countries.
"AliExpress certainly has a logistics advantage over competitors through its increased investment in [logistics unit] Cainiao," said Tanner. "[However] I think their positioning and marketing doesn't have the [same] 'sex appeal' or cool factor than some competitors have, that has really resonated with the lucrative Gen-Z segment."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
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