Alibaba increases investment, fights Amazon in Europe

Alibaba will invest more heavily in Europe ahead of Singles’ Day this year to compete with Amazon in this booming e-commerce market.

In 2020, Alibaba lost its leading position in the Eastern European e-commerce market to rival Allegro from Poland. Photo: AFP

Alibaba remains among the top three online consumer goods sellers in Eastern Europe in 2020, according to Euromonitor International, while Amazon falls out of the top 10 in this region, which includes countries like Poland and the Czech Republic. .

Meanwhile, Amazon still dominates the Western European e-commerce market in 2020, including France and Spain, according to Euromonitor. However, Amazon’s market share in Western Europe has not moved up during the pandemic and is still around 19.3%, on the contrary Alibaba has increased market share to 2.9%, compared to 2% in 2019.

In Eastern Europe, when Covid-19 hit in 2020, Alibaba was “dethroned” and dropped to third place after Polish online shopping platform Allegro took the lead, and rival Wildberries from Russia ranked second.

E-commerce competition in Europe is fiercer this year as this market explodes more strongly as people turn to online shopping more in the context of countries applying social distancing and requiring people to shop online. Limit leaving the house to prevent the epidemic.

“The time has come for the next phase of e-commerce growth in Europe,” market research firm NielsenIQ stated in a recent report.

Particularly for fast-moving consumer goods such as food, beverages, personal care and home, the NielsenIQ report said that e-commerce sales in Italy and Spain in the first quarter of 2021 have doubled compared to with the same period last year.

Alibaba is keen to ride the wave of e-commerce growth in Europe as its online merchandise units announced plans to expand operations in Europe a few weeks before Singles’ Day. 11/11).

Alibaba’s Singles’ Day shopping event in China is similar to Black Friday in the US or Amazon’s Prime Day shopping festival.

A few years back, Alibaba has sought to promote a Singles’ Day “shopping culture” overseas through its own shopping platform AliExpress. AliExpress primarily connects Chinese sellers with overseas buyers, allowing foreign businesses and consumers to buy goods directly from factories in China.

Billionaire Jack Ma, founder of Alibaba, is expected to travel to Europe this month to study the region’s agricultural and technological practices.

Li Dawei, head of the AliExpress supply chain, said that Spain, Russia, and Brazil are strategic markets chosen by AliExpress to “attack” overseas. To encourage Singles’ Day purchases this year, AliExpress plans to double its subsidy on international logistics from last year.

AliExpress confirmed that in the current period of global logistics congestion, they will not increase the shipping fee of customers and so far have not recorded any cases of delay in delivery because this unit has fully covered. cargo flights. Most of the goods sold through AliExpress are small consumer products and do not require shipping.

For this year’s singles, AliExpress says cargo flights all in one Going abroad will increase from 80 to 100 flights per week, applied for 20 days and starting from 11/11.

According to AliExpress, once the packages leave China, they will be delivered to the sorting centers of Cainiao – a logistics subsidiary of Alibaba – with six centers in Europe and one in Russia.

Ahead of this year’s singles holiday, Cainiao has increased investment in installing lockers inside buildings, allowing delivery people to send multiple packages to residents in the vicinity.

In early September, Cainiao announced that it had installed 170 lockers in Madrid and Barcelona (Spain) and more than 80 lockers in Paris (France). The logistics company also said it plans to install a total of 5,000 lockers globally before Singles’ Day, especially in Russia, Poland, Spain, and France.

Cainiao and Alibaba’s international commerce retail sales in the second quarter of 2021 both increased at least 50% year-over-year. Each of these businesses contributes about 5% of Alibaba’s total revenue.

As for AliExpress, the platform does not want to stop only selling to European consumers, but they also attract “old continent” merchants to use this shopping channel with promotional support. .

The head of AliExpress said the unit wants to cooperate with many other e-commerce sites, instead of operating alone. For retail merchants who want to build their own brand on the “online marketplace” AliExpress, this unit will play more of a third-party role than providing logistics services and managing booths.