It is general knowledge right now that Alibaba, one of China and World’s biggest companies, is huge in the Chinese e-commerce space. If you ask anyone in China which their preferred e-commerce platform is, they will name you no other platform than Alibaba or its subsidiaries.
Talking about its subsidiaries, Alibaba is not only limited to e-commerce but it also provides payments solution in China along with many other services. However, we know that a company which wants to make it big globally needs to come out of its home country like Huawei did.
Therefore, Alibaba has also realized the same and is wanting to grow its business in European markets too. Now, Alibaba knows that the European market already has a strong presence of Amazon which is dominating the US, Europe and other markets.
Thus, it needs to create some sort of strategy to enter the market and attract brands to move away from Amazon and sell on Alibaba instead. So we have understood from Reuters’ report that Alibaba is trying to undercut the Amazon Seller fees to lure brands away from the platform.
If you have been an e-commerce seller, you would know that there is a fee which e-commerce platforms take to let brands use their platform. This is also necessary for the platforms to provide great service to their users as well as customers. Since Alibaba is entering the European markets, it can handle certain cut in profits to attract brands and once it does, it can then raise the prices once again.
It is also revealed that “A flood of small businesses have joined its European platform, AliExpress, in recent months but some larger brands are holding back”. The report also reveals that Alibaba’s AliExpress has approached brands “including Mango, Benetton and Spanish fashion group Tendam, owner of Cortefiel, to appear on the site with limited success”