Alibaba competes with Amazon in Europe on Singles’ Day – News Couple

Alibaba competes with Amazon in Europe on Singles’ Day

Staff fill boxes with goods for orders at the warehouse of Cainiao, the logistics branch of Alibaba Group Holding, ahead of the company’s annual Singles’ Day shopping extravaganza in Wuxi, Jiangsu Province, China, on November 9, 2020.

Kelay Shane | Bloomberg | Getty Images

BEIJING — Alibaba is investing more in Europe for Singles’ Day this year, as the Chinese tech giant competes with Amazon for the explosive e-commerce market in the European Union.

Alibaba remained among the top three online sellers of consumer goods in Eastern Europe last year, according to Euromonitor International. Amazon was not in the top 10 list in the region, which includes countries like Poland and the Czech Republic.

Amazon is the best seller in Western Europe, which includes France and Spain, according to Euromonitor. But the US e-commerce giant’s market share in the region has not grown during the pandemic, remaining at around 19.3% in 2020.

The data showed that Alibaba’s market share increased to 2.9% in 2020, up from 2% a year earlier.

Alibaba ranked first in e-commerce in Eastern Europe in 2019, according to Euromonitor International. But Polish online shopping site Allegro took first place in 2020 during the pandemic, while Russian rival Wildberries took second place, according to the data. That pushed Alibaba to third place last year.

The competition for Europe comes with another surge of online shopping in the region this year. Stay-at-home policies and other social distancing measures have been in place for months amid a protracted battle to control multiple waves of the Covid-19 outbreak.

“It’s time for the next phase of e-commerce growth in Europe,” NielsenIQ said in a June report.

For “Fast Moving Consumer Goods” — a category that includes food and beverage, personal care and home care — the report said e-commerce sales growth doubled in Italy and Spain in the first quarter of this year, compared to the same period in 2020. Updated numbers were not available to date. Publish this article.

Ali Baba prepares for Singles’ Day – in Europe

Alibaba is eager to ride that wave of growth. Various business units announced expansion into Europe in the weeks leading up to the Singles’ Day Shopping Festival.

The shopping event, led by Alibaba in China, is similar to Black Friday in the US or Prime Day in Amazon. Singles’ Day is also known as “Double 11” because it falls on the eleventh day of the eleventh month of the year – November 11.

In recent years, Alibaba has promoted the overseas shopping festival through its own e-commerce site to sell to consumers outside of China, called AliExpress. The platform mostly connects Chinese sellers with buyers abroad, allowing foreign companies and consumers to buy directly from factories in China.

Double 11 will be a great way for many of these companies as they begin to grow. It is a great way for you to gain clients.

Jonathan Cheng

Partner, Bain & Company

Spain, Russia and Brazil are among the core countries for AliExpress’ overseas expansion, Lee Dawei, AliExpress supply chain head, told CNBC in a Mandarin phone interview earlier this month.

Alibaba founder Jack Ma is said to be traveling to Europe this month to study local agricultural practices and technology, in his first trip away from Greater China in more than a year. The company referred CNBC to the Jack Ma Foundation, which did not immediately respond to a request for comment.

Delivery cost support

AliExpress plans to double its support for international logistical support for Singles’ Day this year from last year. That’s a slowdown in the pace of the company’s claims last year that it spent five times as much on subsidies as it did in 2019.

AliExpress, during the global shipping congestion period, claimed that it did not raise costs for customers and did not experience any significant delays in delivery due to its reliance on charter flights. Most of the goods sold through AliExpress are also small consumer products and do not need to be transported by ship.

For Singles’ Day, AliExpress said weekly foreign charter flights will rise to 100 weekly flights from November 11-30, up from 80 weekly flights.

Cainiao, Alibaba’s logistics arm, launched parcel lockers in major cities in Spain and France in September 2021. Prior to November 11, on Singles’ Day, Alibaba accelerated its investment in parcel lockers, allowing shipping companies to deliver multiple packages to residents of one neighborhood at a time One. .


Once the parcels leave China, they can be distributed at the sorting centers of the Cainiao logistics arm, six in Europe and one in Russia, according to the company.

The shopping festival has also accelerated investment in parcel lockers, which allow shipping companies to deliver multiple packages to residents of one neighborhood at once.

In early September, Cainiao announced that it had installed a network of 170 lockers in Madrid and Barcelona, ​​Spain, and more than 80 lockers in Paris, France. The logistics unit said it plans to install a total of 5,000 lockers globally ahead of Singles’ Day, mainly in Russia, Poland, Spain and France.

Cainiao’s revenue and international retail trade grew at least 50% in the quarter ended June 30 compared to a year ago, with each business segment accounting for approximately 5% of Alibaba’s total revenue.

Building local customers

Lee, head of AliExpress supply chain, said that AliExpress not only wants to sell to consumers in Europe, but also wants local merchants to log on to its platform, where they can take advantage of subsidies.

However, he said, many companies prefer to work with multiple e-commerce sites, rather than using AliExpress alone.

Small and medium-sized merchants also want to build their own brands on those platforms and on their own websites, Lee said, noting that in these cases AliExpress plays a third-party role by selling logistics and managing stores.

Read more about China from CNBC Pro

“Overall, I think there’s been a lot of learning from China in terms of, how do you think about e-commerce,” Jonathan Cheng, partner at Bain & Company and head of the company’s major Chinese retail practice, said on a call with reporters on Wednesday. “We can say that China is absolutely in the lead in terms of customer operations, in terms of marketing, in efficiency and all of that.”

“Double 11 is going to be a great way for a lot of these companies when they start growing. It’s a great way for you to acquire customers,” Cheng said, declining to comment specifically on Europe. Amazon did something very similar.

But he noted that after years of rapid growth in the number of customers, companies will need to think about how to retain users and earn profits.

– CNBC channel Coastal Roy Choudary Contribute to the report.

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