China’s Alibaba is seducing European and American small businesses as it goes global

BEIJING – Chinese e-commerce giant Alibaba is ramping up its global expansion with new services aimed at attracting small businesses in the US and Europe.

Alibaba.com – the company’s business-to-business platform that sells to companies outside China – announced Thursday that it is launching ‘Alibaba Guaranteed’ to provide greater assurance over delivery, payments and dispute resolution.

The platform is part of Alibaba’s fast-growing international business, which also sells directly to consumers abroad through sites like AliExpress.

While consumers in China have long enjoyed delivery tracking and favorable return policies, small businesses purchasing through cross-border e-commerce platforms have not, due to the added complexity of international trade.

Alibaba.com’s new service aims to provide buyers with clearer delivery dates and free local returns, the company said in a press release.

“We think this is in line with current global trends,” Kuo Zhang, president of Alibaba.com, said in an interview on Thursday, according to CNBC’s translation of his remarks in Mandarin.

Noting an increasing trend of fragmentation in supply chains, he said a growing number of local companies, whether in the cosmetics or automotive industries, need to source globally to protect profit margins.

The online platform mainly sells products from China-based suppliers to small businesses in Europe, the US and other parts of the world. Alibaba.com’s website indicates that it is possible to purchase individual products or in bulk, but states on the user registration page that “suppliers prefer to do business with companies.”

Zhang claimed that the number of buyers on Alibaba.com has at least tripled in the past five years, with an online gross merchandise value of about $50 billion. GMV measures total sales over a specific period.

Zhang said that in the past three to four years, among the more popular products sold on Alibaba.com are custom T-shirt printing machines or laser cutting machines.

He noted that since the end of the Covid-19 pandemic, increased interest in supply chain diversification has driven demand for such machines. The growth of the new energy vehicle industry has also led to demand for new auto parts, which Alibaba.com sells, Zhang said.

Sports products are also popular with customers in Europe, he said.

In November, Alibaba.com invested in the German business-to-business company Visable and its European marketplace Europages.

Alibaba.com works with many EU-based suppliers who sell within the bloc, Zhang said. He added that the company aims to help the region accelerate digitalization by deploying more technology for business.

Trade activity within the EU is much greater than the bloc’s trade with other countries, he pointed out.

Alibaba.com will also start integrating artificial intelligence tools into the platform this year, Zhang said.

They include the ability of sellers to use AI to quickly generate product descriptions using keywords, or provide after-hours customer service support, he said.