- Tram Ho
Alibaba, which is planning to expand globally and the Covid-19 epidemic, has given China’s largest e-commerce company a better opportunity to implement this strategy.
In the past few weeks, the Hangzhou-based company has emerged as an important intermediary between Chinese factories and overseas customers with urgent global demand for equipment. medical devices needed to combat Covid-19 – from masks to hand washers and ventilators.
In part, this was a charitable effort by founder Jack Ma and his charitable foundation, which has shipped more than 40 million personal protective equipment (PPE) to 150 countries and pledged to donate 101 million masks for the World Health Organization (WHO).
However, the newly discovered PPE product group also opens up a great new market opportunity for Alibaba, as global consumers first look to the e-commerce giant and see if they can offer it. things.
In Europe and especially the US, the company’s platforms benefit from a strong demand for protective equipment that is difficult to find in the country and on overloaded commercial platforms such as Amazon or eBay. .
In Spain and Italy, the number of people visiting AliExpress – Alibaba’s platform that connects Chinese merchants with worldwide buyers increased by 20% and 14% in the first quarter of the year, respectively.
“We are desperately in need. The state only allows one disposable mask, but we have six adults and two children,” said a resident in northern Italy. He placed his first order on AliExpress this month after not being able to find a mask anywhere else.
In recent months, Alibaba has specifically targeted areas such as southern Europe, where online shopping has not been developed like countries like the US, UK and Germany. Therefore, they found that the competitors here are not significant.
The company also aggressively poured advertising money into these areas in an effort to win new customers. According to Sensor Tower, Alibaba is now one of the most viewed shopping apps in France, Spain and Italy in February and March on Facebook’s advertising network.
Meanwhile, the company is also gaining new customers across Asia.
“The place I live in is completely PPE-free. The masks here are sold like hot-hunted cakes. Local sellers have doubled prices after buying from AliExpress,” said a 31-year-old man from Pakistan shares. Last month, he made his first order with 50 masks on AliExpress.
Connecting PPE suppliers to the world
Alibaba’s emergence as a PPE supplier comes at a time when the global expansion plan is already scheduled. Last year, AliExpress opened to both local sellers in Spain and Italy and many other countries to reduce platform competition by earning less commissions.
According to David Dai of the Bernstein Research Institute, the company is tracking Alibaba’s international growth on two fronts: Directly through AliExpress and competitive markets; through locally operated e-commerce platforms in emerging markets.
“Alibaba certainly has an ambition to expand abroad and become a global e-commerce giant,” he said.
In recent years, the company has taken steps to serve its ambitions to the world by acquiring local e-commerce websites including Singapore’s Lazada, Trendyol of Turkey and Daraz of Pakistan. . Elsewhere, Alibaba also invested $ 945 million in Indonesia’s Tokopedia platform, took a stake in Snapdeal of India and formed AliExpress Russia joint venture in Russia.
Before the outbreak, Alibaba’s international e-commerce business contributed 6% of revenue in the fourth quarter of 2019, up 23% from the previous year. Cainiao Shipping alone reported a 67% growth rate in part because it had to ship more orders, to 120 million overseas buyers every year.
AliExpress was born in 2010 as the center of Alibaba’s global expansion efforts. However, there is a catch: The price is low, but in return has to wait a long time because most goods come from China. As a result, AliExpress mostly achieves success in countries where Amazon’s presence is very weak.
“Alibaba certainly has an ambition to expand abroad and become a global e-commerce giant.”
“Wherever Amazon is weak or not, AliExpress will dominate,” says Ralph Huebner – Partner at Ecom Consulting GmbH.
Covid-19 has “introduced” new customers to the platform. In the first 3 months of this year, AliExpress ranked among the most downloaded shopping apps in countries including Spain, France, and Finland.
Meanwhile, the company has also increased air freight – mostly for masks and other medical equipment for parts of Europe including Liege, Belgium – where Cainiao is creating a hub. transported with an investment value of up to 82 million USD in a plot of land 30 times larger than a football field. The hub is connected to freight trains from China and is an important focal point for Alibaba’s plan to compete with Amazon in Europe.
“From Hangzhou to Liege there are usually 3 flights per week. Now it is 4 flights. We will continue to increase 1 more flight in the next 2 weeks,” said James Zhao – General Director of Cainiao Global Supply Chain.
Cainiao plans to build a similar shipping center in Africa. Mr. Zhao revealed that things are proceeding in the early stages. The company hopes that the continent’s 1.2 billion people can help them fulfill their goal of serving 2 billion customers by 2036.
Not just a mask
After Covid-19 has passed, the challenge for Alibaba will be to forget what is achieved now and convince the world to continue using its platform not just to buy PPE products.
“The mask business is the reason customers come to AliExpress. When people realize it will be easier to buy masks on AliExpress, they will use it to buy other things in the future,” According to Chris Bu – Leader at 4PX – Cainiao’s partner company.
In Europe, the company faces a battle similar to what it experienced in its home market, where five years ago it showed that shipping speeds were slow and unreliable compared to competitors. JD.com. Ultimately, Alibaba has addressed this by investing heavily in shipping infrastructure and buying stakes in several industry players. Now, they are trying to continue using such a strategy with the European market.
Top shopping apps selected in European countries.
4PX has warehouses in 7 European countries and is working with AliExpress to build local warehouses.
“Chinese e-commerce has taken off since the SARS pandemic. I believe we will see a similar trend in Europe right now.”
The company’s biggest challenge now is how to attract customers who are already loyal to Amazon.
In addition, last week, Alibaba took actions to prevent the sale of fake masks, poor quality – a problem that damages the reputation of Chinese products. Currently, factories that sell masks on Alibaba.com must have an additional certificate.
Meanwhile, Mr. Ahmed said that he had meticulously read product reviews before placing an order with a seller on AliExpress. However, in the end, this person did not deliver the first order to him and AliExpress finally refunded.
“With KN95 and N95 masks, they will give you about 100,000 results. It’s hard to censor on this website, unlike Amazon,” said Yury Tsukerman, creator of the Areweoutofmasksyet.com website to help PPE buyers through. AliExpress.
Source : Genk