COMPETITIVE LANDSCAPE
Though Alibaba has long looked at the overseas market as a potential money maker, with founder Jack Ma saying in 2017 that Alibaba aimed to serve 2 billion global consumers by 2036, it is having to make up ground in many markets ceded to rival Temu.
“Historically, execution has been the problem for Alibaba’s international ambitions,” said Jianggan Li, founder and CEO of Momentum Works, a venture and insights firm.
“Alibaba spent years debating whether it would be too difficult or too challenging to compete with Amazon (in the US), and Temu just went ahead and did it.”
Temu, which sells US$5 earbuds and US$10 dresses among other things to over 60 global markets, has grown in popularity since its 2022 launch, with Chinese investment management firm CICC estimating Temu raked in US$18 billion in revenue in 2023.
PDD does not break out revenue for Temu separately and does not comment on the accuracy of third-party sales estimates.
To better compete with rivals, Alibaba is now utilising its competitive advantages, offering five-day delivery windows to 11 markets on a selection of products, backed by its investments in global logistics.
The buyback of logistics arm Cainiao in March will likely strengthen the logistical advantages AliExpress has over rivals.
AliExpress has a presence in more than 100 markets.
Alibaba has the will and the money to pump into growth for AliExpress, but most importantly, the competitive landscape is forcing the issue, changing the dynamics of cross-border e-commerce from China, Li said.
“AliExpress has to find a way to compete with and differentiate from Temu” in order to win market share, Li said.
“I mean, there’s no other choice.”
From: channelnewsasia
Business News