AliExpress tries to draw brands on Amazon: sources

[SHANGHAI] Alibaba Group Holding is trying to attract established brand names on Amazon.com to its global e-commerce site AliExpress, stepping up efforts to expand its footprint on the Seattle-based firm’s home turf.

AliExpress, Alibaba’s online retail portal for markets outside China, is trying to add more major brands by promising lower shipping fees and offering to take a lower cut of sales than Amazon does, according to people familiar with the matter.

AliExpress is rolling out the new initiative in the hope of attracting more customers and boosting sales in key markets including Europe and Latin America, the people said, declining to be named to discuss private information.

The Chinese online marketplace will also tap into the large pool of brands that’s already on Alibaba’s domestic e-commerce platform T-Mall, they added. They did not provide details on how much funds or resources Alibaba is pouring into the campaign.

Alibaba’s overseas e-commerce unit did not immediately respond to an emailed request for comment. AliExpress already hosts some of the biggest brands from China, including smartphone supplier Xiaomi and Labubu-branded plush toy maker Pop Mart International Group.

Alibaba first tried to push into the US market about a decade ago but the venture never took off and the company sold the US platform to a rival shortly after.

Still, steady growth in its international unit and the success of PDD Holdings’ Temu and Shein Group may be encouraging the Chinese company to explore ways to broaden its footprint in markets like the US and Europe, where AliExpress has operated for years without making much headway against Amazon.

Beyond AliExpress, the Chinese e-commerce leader’s foreign presence is largely confined to regionally focused businesses including Lazada in South-east Asia and Trendyol in Turkey.

While Alibaba said earlier this year that developing artificial general intelligence is the company’s primary objective now, e-commerce remains its bread and butter. That core business is so vital that founder Jack Ma became instrumental in the Hangzhou-based company’s decision to spend as much as 50 billion yuan (S$9 billion) on subsidies to beat back e-commerce foe JD.com.

Alibaba’s overseas e-commerce unit posted 19 per cent revenue growth and narrowing losses in the past quarter, but has yet to turn a profit.

The company’s renewed attempt at growing its US presence comes at a geopolitically charged moment as President Donald Trump has targeted Chinese retailers by raising tariffs on small parcels from China. Consequently Temu decided to offer deep discounts to be competitive in the US. BLOOMBERG