Alibaba plans to attack Amazon

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DusseldorfCompany founder Jack Ma has never made a secret of the fact that he sees Alibaba not as a Chinese, but as a global company. And since he announced his retirement from the company in September 2019, he is once again pushing the international ambitions of his company. Alibaba is expected to reach around two billion customers by 2036.

Ma issued this goal together with his designated successor, Daniel Zhang. "Globalization has always been Alibaba's long-term goal," Zhang recently told investors in a letter. "Our vision is to help all our customers with digital transformation."

Still, the panning to international business hardly figures in the years that Alibaba now submitted. Although the company now has a trading volume of $ 853 billion – about three times as much as Amazon and more than a hundred times that of Zalando. But that comes largely from the home market.

For example, retail sales abroad rose just as fast as those in China, ie by almost 40 percent – and thus still account for only five percent of total sales.

"Alibaba has not yet made the big leap in Europe," says Kuno Neumeier, managing partner of the logistics consulting firm Logivest. But the ambitious online giant is now taking decisive steps to become a serious competitor in Europe as well. "In the market, we hear that the company is talking to more and more partners in order to significantly expand its presence in Europe.

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Among other things, the focus is on the ports, in order to meet the logistical requirements, "reports Neumeier. Alibaba is also expanding its new hub in Liège, through which goods flows in Europe are to be channeled.

So far, there were only two ways in Alibaba's global strategy. One went from international manufacturers to customers in China. TMall is the platform with which Alibaba also promotes German brands. The other path went from Alibaba Chinese producers to customers in the world. With the Aliexpress platform Alibaba reaches end users in 150 countries, also in Germany.

Now Alibaba wants to merge both approaches. Aliexpress will also be open to manufacturers outside China. "We are in the first year of our strategy of being local too global," said Alibaba manager Trudy Dai of the Financial Times. In the first step, small and medium-sized companies from Russia, Turkey, Italy and Spain would have access to the platform. When German dealers are included, is still open.

This opens the Chinese online retailer for the first time its global network for manufacturers in Europe – and thus seeks direct competition with Western marketplaces such as Amazon and Ebay. "Alibaba is consistently pursuing its growth strategy in cross-boarder e-commerce with Aliexpress," observes Olaf Rotax, China expert and managing director of digital consulting dgroup from the Accenture network.

"The market for cross-boarder e-commerce will at least double in the next few years, and Alibaba wants to be number one here," says Rotax.

Alibaba wants to deliver the network on the basis of which future global commerce will work. According to manager Dai, the aim is to make Aliexpress the spearhead of global expansion. In Southeast Asia Alibaba had already bought the online trading platform Lazada of the German founder Maximilian Bittner.

"Our international trading business is showing promising growth," Alibaba said in announcing the annual figures. Lazada and Aliexpress together already have 120 million active customers.

Expectations may be overdone, says Marcel Münch, co-founder of China-based startup Dongxii. "Theoretically, the market is big. In practice, I find the task difficult, "says Münch. Cross-border trade continues to present many challenges.

His verdict on Aliexpress is also sober: "The interface and also the communication in emails were not on a standard, which one knows of other offerers in the segment." This could become now in the course of the extension of the platform on western manufacturers change, Münch admitted. International expansion is still at an early stage.

Also adviser Rotax warns of an overestimation of the ambitions. "If Alibaba is stepping up its activities in Europe, it will focus on importing European quality products to China and supporting Chinese tourists in Europe," he says.

But that can change quickly – even with targeted takeovers in Europe. In January Alibaba bought a company in Germany for the first time: the Berlin start-up Data Artisans. Even Zalando is traded as a possible target for participation. That would be easily possible: Alibaba's net profit was the equivalent of 10.7 billion euros – and thus higher than the total market capitalization of Zalando.

Also interesting would be the takeover of the Otto subsidiary Hermes, for which an investor has recently been sought and which offers a logistics chain to the end customer. "If a logistics company like Hermes was sold to Alibaba," says logistics consultant Neumeier, "that could change everything in the market at once."

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