BEIJING — Alibaba is investing additional in Europe for Singles Day this 12 months, because the Chinese language tech large competes with Amazon for the European Union’s exploding e-commerce market.
Alibaba remained among the many high three on-line sellers of shopper items in jap Europe final 12 months, in keeping with Euromonitor Worldwide. Amazon wasn’t on the highest 10 record for the area, which incorporates nations like Poland and the Czech Republic.
Amazon is by far the highest vendor in western Europe, which incorporates France and Spain, in keeping with Euromonitor. However the U.S. e-commerce large’s market share in the area didn’t develop in the course of the pandemic, remaining at about 19.3% in 2020.
In distinction, Alibaba’s market share elevated to 2.9% in 2020, up from 2% the prior 12 months, the info confirmed.
Alibaba held first place in jap Europe e-commerce in 2019, in keeping with Euromonitor Worldwide. However Polish on-line procuring website Allegro took first place in 2020 in the course of the pandemic, whereas Russian rival Wildberries took second, in keeping with the info. That pushed Alibaba down to 3rd place final 12 months.
The competitors for Europe comes as on-line procuring in the area bought one other elevate this 12 months. Keep-home insurance policies and different social distancing measures have remained in place for many months amid a protracted struggle to regulate a number of waves of Covid-19 outbreaks.
“It’s time for the next stage of e-commerce growth in Europe,” NielsenIQ mentioned in a report in June.
For “fast-moving consumer goods” — a class that features meals, drinks, private care and residential care — the report mentioned e-commerce gross sales progress doubled in Italy and Spain in the primary quarter of this 12 months, in contrast with the identical interval in 2020. Up to date figures weren’t out there as of the publication of this text.
Alibaba prepares for Singles Day — in Europe
Alibaba is eager to journey that wave of progress. Totally different enterprise items have introduced enlargement into Europe in the weeks main as much as the Singles Day shopping festival.
The shopping event, spearheaded by Alibaba in China, is similar to Black Friday in the U.S. or Amazon’s Prime Day. Singles Day is also known as “Double 11” since it falls on the 11th day of the 11th month of the year — Nov. 11.
In recent years, Alibaba has promoted the shopping festival overseas through its own e-commerce website for selling to consumers outside of China, called AliExpress. The platform mostly connects Chinese sellers with overseas buyers, allowing foreign businesses and consumers to buy directly from factories in China.
Spain, Russia and Brazil are among the core countries for AliExpress’ overseas expansion, Li Dawei, head of AliExpress Supply Chain, told CNBC in a Mandarin phone interview earlier this month.
Alibaba founder Jack Ma is reportedly traveling in Europe this month to check native agricultural practices and expertise, in his first journey away from larger China in greater than a 12 months. The corporate referred CNBC to the Jack Ma Basis, which didn’t instantly reply to a request for remark.
Subsidizing supply prices
AliExpress plans to double its subsidies for worldwide logistics assist this Singles Day from final 12 months. That is a slowdown in tempo from the corporate’s claims final 12 months that it spent five times as much on subsidies as it did in 2019.
AliExpress claimed, during a period of global shipping congestion, that it did not raise costs for customers and hasn’t seen any major delivery delays because of its reliance on charter flights. Most goods sold through AliExpress are also small consumer products and don’t need to be transported by ship.
For Singles Day, AliExpress said weekly overseas charter flights will increase to 100 a week from Nov. 11 and 30, up from 80 a week.
Once the packages leave China, they can be distributed at logistics arm Cainiao’s sorting centers, six in Europe and one in Russia, according to the company.
The shopping festival has also sped up investment in package lockers, which allow couriers to deliver many packages to one neighborhood’s residents at once.
In early September, Cainiao announced it had installed a network of 170 lockers in Madrid and Barcelona in Spain, and more than 80 in Paris, France. The logistics unit said it planned to install a total of 5,000 lockers globally before Singles Day, especially in Russia, Poland, Spain and France.
Cainiao and international commerce retail revenue both grew by at least 50% in the quarter that ended June 30 compared to a year ago, with the business segments each accounting for about 5% of Alibaba’s overall revenue.
Building up local customers
Not only does AliExpress want to sell to consumers in Europe, it also wants local merchants to sign onto its platform, where they can take advantage of subsidies, said Li, the head of AliExpress Supply Chain.
However, he said many businesses prefer to work with multiple e-commerce sites, instead of just with AliExpress alone.
Small and medium-sized merchants would also like to build their own brands on those platforms and on their own websites, Li said, noting that in those cases, AliExpress plays more of third-party role by selling logistics and store management services.
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“In general I think there’s lots of learning from China in terms of, how do you think about e-commerce,” Jonathan Cheng, partner at Bain & Company and leader of the firm’s Greater China Retail practice, said on a call with reporters Wednesday. “We would argue that China’s absolutely at the forefront in terms of customer operations, and in marketing and in effectiveness and all that.”
“Double 11 is going to be a great way for a lot of these companies as they start to grow. It’s a great way for you to go acquire customers,” Cheng said, declining to comment specifically on Europe. “Amazon basically did a very similar thing.”
But he noted that after years of rapid growth in the number of customers, companies will need to think about how to retain users and earn profits.
