Alibaba.com, a business-to-business (B2B) cross-border e-commerce platform owned by Alibaba Group Holding, expects its gross merchandise volume (GMV) to reach $60 billion in 2024, up 20 percent from last year's $50 billion, said the platform's president, Zhang.
Speaking in an interview with the South China Morning Post in Hong Kong on Thursday, Zhang said the procurement platform's sales growth has slowed after a sevenfold increase in GMV over the past five years.
“It's very hard to double GMV every year as your base grows,” he said. “The fundamental problem is in the business model, and we need to make new breakthroughs and changes.”
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Alibaba.com's President Zhang attended the Greenwich Economic Forum in Central, China on June 6, 2024. Photo: Edmund So alt=Alibaba.com's President Zhang attended the Greenwich Economic Forum in Central, China on June 6, 2024. Photo: Edmund So>
Alibaba.com started in 1999 as an online yellow book helping overseas bulk buyers find Chinese manufacturers. It now functions primarily as a trading platform connecting Chinese suppliers directly with overseas businesses. Alibaba.com is part of Alibaba International Digital Commerce Group, one of the growth engines of Alibaba Group, owner of the South China Morning Post.
Total exports by Chinese merchants on the platform reached $350 billion last year, roughly 10 percent of China's total exports, which are expected to grow 7 percent in 2023 to reach $3.6 trillion.
Alibaba.com has more than 200,000 suppliers, 90 percent of which are based in China, and Zhang said half of the products offered on the platform are non-consumer, including machine tools, construction materials, laser cutting equipment and even small food trucks.
“Sales of non-consumer goods are growing at a faster pace than consumer goods,” he said.
Alibaba.com is betting on growing demand for online procurement from small and medium-sized businesses, while China-backed shopping apps such as Temu, owned by Alibaba rival PDD Holdings, are rapidly winning over overseas consumers.
“We don't actually have any big direct competitors with Temu or TikTok,” Zhang said, referring to the ByteDance-owned short-video platform's recent forays into e-commerce. “These platforms are impacting many traditional small retailers in overseas markets, but we believe in the importance of the local ecosystem.”
Alibaba also operates a number of consumer-facing apps, including Lazada and AliExpress.
Alibaba.com on Thursday announced the launch of Alibaba Guaranteed, a service aimed at making B2B sourcing as easy as shopping on sites like Amazon.com, offering products at a fixed price including shipping and guaranteeing delivery times.
For sellers, the service is similar to a model called “half custody,” in which suppliers outsource shipping, delivery, payments and customer service to the platform. Zhang said lowering barriers to foreign trade will encourage Chinese merchants to go after foreign buyers directly, because those companies typically don't have the capacity to handle complex cross-border trade procedures themselves.
In Yiwu, a city in eastern Zhejiang province known for its small and medium-sized manufacturing industries, the number of Alibaba.com customers has increased by 70 percent over the past two quarters.
Alibaba.com is also rolling out artificial intelligence (AI) tools, such as on-site chatbots, to assist exporters.
The company introduced an AI tool in October to help users showcase products online and manage customer interactions, which has generated $100 million in annual recurring revenue, Zhang said.
In July, the platform plans to release AI tools to help shoppers find the right products.
“If you have an idea, an intention or an image, we can help you find the right merchant to make the right product,” Zhang said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative news source on China and Asia for more than a century. For more SCMP articles, visit the SCMP app or follow SCMP on Facebook. twitter P a g e Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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