Alibaba Channels Taobao Retailers to AliExpress to Expand to International Markets

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AliExpress, a B2B wholesaling service under Alibaba Group, announced to change its role to an online retailing platform targeting at individual consumers outside China.

AliExpress was first released in late 2009 as a wholesale platform for outside businesses to purchase small volume orders from Chinese sellers. But till now 65% of buyers are individuals. “More and more individuals want to buy good value-for-money goods from China. Given this context, AliExpress sped up the transformation”, according to Shen Difan, head of AliExpress (source in Chinese).

AliExpress began channeling Taobao sellers onto the platform from 2012. It is said the monthly transactions in December 2012 were more than that of the whole year in 2010, and the sales in January 2013 increased 420% year-over-year.

Taobao retailers, in fact, have become the biggest seller group on the platform. Of the newly added sellers each day, 95% have already had Taobao stores, Shen said. In the past March, the back-end systems of the two platforms have been integrated.

The same with Taobao, the payment solution with AliExpress would withhold payments until buyers confirm of reception — PayPal was introduced as a payment choice in mid-2010 but announced to stop supporting it a little over one year later. Also like Taobao, it organized sellers to do a promotion activity one week ago, the same with what Taobao has always done to boost sales for retailers.

The minor difference AliExpress has from Taobao is it charged sellers a 5% or so commission — it’s unknown whether they’d continue to do so after the transformation.

Previously its target market was the U.S., but now they decided to change the focus to Russia, India, Brazil and Eastern Europe where the fastest growth has come from. It is said Russia has contributed the biggest number of transactions. Apart from the low-priced Chinese goods, the poorer e-commerce infrastructure in those developing countries is another reason that consumers there would like to buy from platforms like AliExpress, according to Shen.

Now the platform has covered over 220 countries. There were about 110 thousand sellers on the platform with 50 million items for sale as of March 2014. The categories of goods also expanded from electronics to others such as apparel and home furnishings.