China's Alibaba Sees Big Growth With AliExpress Site

Chinese e-commerce giant Alibaba Group reported Tuesday that its wholesale supplier site at AliExpress is seeing "tremendous growth" and is beating out its competitors, just one year after it was launched.

In China, Alibaba has already grown to dominate the e-commerce market. The company's site at Alibaba.com ranks as the country's largest business-to-business transaction platform.

In April of last year, the company launched AliExpress to better cater to overseas retailers. The English-language site is meant for small to medium-size businesses that want to source their products from Chinese manufacturers. Many of the buyers on the site come from the U.S., U.K, Australia and Brazil.

After a year in operation, the site has now risen to surpass its competitors in both traffic and total merchandise value sold, said Tony Liu, the general manager for AliExpress. Some of those competitors include Made-in-China.com, Lightinthebox.com and Globalsources.com, which all provide similar e-commerce services.

"From a growth perspective, we couldn't be happier," he said.

On Tuesday, AliExpress launched its new Premier Channel, a site that features Chinese name brand sellers of clothing, jewelry and electronics. The goal has been to highlight Chinese companies that can provide both high-quality products along with efficient and service and delivery. More than 30 Chinese brands sell on the site.

"This is just the beginning, we want to have more sellers on the site," Liu said. He added that AliExpress Premium could also one day feature merchants from other countries outside of China.

The launch of AliExpress has just been one of the moves Alibaba has made to help bridge e-commerce from China to other major markets. Last year, Alibaba made two acquisitions in the U.S., by buying Vendio and Auctiva, both third-party developers of eBay tools for online merchants. The deals were meant to open avenues for U.S. small businesses to use Alibaba's e-commerce sites to help them source their products.

Alibaba Group's CEO Jack Ma and the head of eBay John Donahoe also both said during speeches in September that they would explore online partnerships to connect Chinese sellers with buyers in the U.S.

As for AliExpress, the company credits part of its current success to the Alibaba brand name, Liu said. "People come to Alibaba with a trust in us" he added.

The company's image, however, came under fire in February when it was disclosed that more than 2,300 suppliers on Alibaba.com had committed fraud against buyers. A company investigation found that 100 sales people, along with several supervisors and sales managers, were responsible for allowing the fraud to go undetected.

In response, Alibaba.com's CEO David Wei resigned. The storefronts of the suppliers were shut down, while the sales people involved were also fired. The company paid US$1.7 million to 2,249 customers who were victims of the fraud.

Liu said that Alibaba took the correct steps in handling the fraud cases, and customers he has talked to agree. "When we saw the problem we didn't ignore it," he said. "Our customers noticed that and this gave them more trust in us."

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