Alibaba’s strategy of conquering the world: Silently developing a sales website in 200 countries, customers only have to pay when they have received the goods

The WSJ reports that internet giant Alibaba is starting to allow European buyers to pay later for purchases on their international commerce platform. Accordingly, when customers receive the goods, they need to pay. It is believed to be an attempt to boost global sales as growth in Alibaba’s home country slows.

On Monday, a fintech company called Splittit Payment said that it would partner with Ant Group’s Alipay to provide post-payment options for customers of AliExpress, an e-commerce platform operated by Alibaba. .

The service will initially be available in Germany, Spain and France, and may later expand to other international markets. Called “Pay After Delivery,” the service allows individuals to pay later for goods via credit card.

AliExpress was founded in 2010 and the platform sells everything from toys, clothing, electronics to consumer goods in 200 countries. Most of the sellers on AliExpress are China-based businesses, and their international delivery times are often quite long.

Even according to an AliExpress spokesperson, in some major European cities such as Paris or Madrid, an item can take up to 10 days to arrive. For further areas in Europe, delivery time can be up to an average of 15-20 days.

The company also offers guaranteed delivery, which means Alibaba will compensate customers if their goods are not delivered on time.

Orders through AliExpress fell in the third fiscal quarter of last year. The company said that demand fell due to the weak euro against the dollar. There are also a number of other reasons such as tax regulations, supply chains and logistical disruptions.

The launch of Alibaba’s pre-paid post-purchase service comes at a time when Chinese e-commerce companies are looking to expand more abroad to offset slow revenue growth in their home market.

Once one of China’s fastest-growing tech businesses, Alibaba’s revenue for the first two fiscal quarters last year was flat from the same period a year earlier. This is the result of the decrease in purchasing power of Chinese consumers during the period of applying many strong measures to combat Covid-19. The company even turned a loss in the third quarter of last year.

In 2022, Alibaba CEO Daniel Zhang said that globalization is one of the company’s central strategies along with consumption and cloud computing. Alibaba’s international retail business, including AliExpress, contributes only 5% of the company’s total revenue. AliExpress is facing stiff competition from Chinese-owned online retailers including fashion house Shein and Pinduoduo’s US subsidiary Temu.

Buy now, pay later is a service that is gaining attention around the world although retailers or merchants incur financial costs for customer debt and often no interest. In China, Ant branch has long provided short-term consumer finance options to assist shoppers on Alibaba’s e-commerce platforms.

By partnering with Splitit – an amount will be placed on a customer’s credit card when they buy something on AliExpress. After the customer confirms receipt of the goods, the money will be transferred to the seller.

Source: WSJ