Alibaba.com, a cross-border business-to-business (B2B) e-commerce platform owned by Alibaba Group Holding, expects $60 billion in gross merchandise value (GMV) by 2024, which would be a 20 percent increase from 2024 .the $50 billion last year, said Zhang Kuo, chairman of the platform.
The sourcing platform’s revenue growth slowed after a sevenfold increase in GMV over the past five years, Zhang told the South China Morning Post in an interview in Hong Kong on Thursday.
“It’s quite difficult to double the GMV every year because of an ever-increasing base,” he said. “The core issue is about the business model, because we need to achieve new breakthroughs and transformations.”
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Alibaba.com President Zhang Kuo attends the Greenwich Economic Forum in Central on June 6, 2024. Photo: Edmond So alt=Alibaba.com President Zhang Kuo attends the Greenwich Economic Forum in Central on June 6, 2024. Photo: Edmond So >
Alibaba.com started in 1999 as an online yellow book to help foreign bulk buyers find Chinese manufacturers. It now functions largely as a transaction platform that connects Chinese suppliers directly with foreign companies. Alibaba.com is part of Alibaba International Digital Commerce Group, one of the growth engines of Alibaba Group, the owner of South China Morning Post.
Chinese traders on the platform saw the combined value of their exports reach $350 billion last year, or about 10 percent of the value of all Chinese exports, which rose 7 percent to $3.6 trillion in 2023.
Alibaba.com has more than 200,000 suppliers, 90 percent of which are located in China. Half of the products offered on the platform are not for consumer use, according to Zhang. These include machine tools, building materials, laser cutting devices and even small food trucks.
“Non-consumer goods sales are growing faster than consumer goods,” he said.
As Chinese-backed shopping apps like Temu, owned by Alibaba rival PDD Holdings, quickly win over foreign consumers, Alibaba.com is betting on growing demand from small businesses to shop online.
“Actually, there is no major direct competition with Temu or TikTok,” said Zhang, referring to ByteDance’s short video platform’s recent move into e-commerce. “They affect many of the traditional small retailers in overseas markets… but we believe in the importance of local ecosystems.”
Alibaba also has a number of consumer-facing apps, including Lazada and AliExpress.
On Thursday, Alibaba.com announced the launch of Alibaba Guaranteed, a service designed to make B2B sourcing as easy as shopping on sites like Amazon.com. The service offers products at fixed prices, including shipping costs and guaranteed delivery times.
For sellers, the service is similar to a model known as “half-custody,” where suppliers outsource shipping, delivery, payment and customer service to the platform. Zhang said lowering the barrier to foreign trade encourages Chinese traders to approach foreign buyers directly, as these companies are usually unable to handle complex cross-border trade procedures on their own.
In Yiwu, a city in eastern Zhejiang province known for its small manufacturers, the number of Alibaba.com customers has increased 70 percent in the past two quarters.
Alibaba.com has also rolled out artificial intelligence (AI) tools such as an on-site chatbot to help exporters.
Last October, it introduced an AI tool that allows users to list goods online and manage customer correspondence. According to Zhang, the tool’s annual recurring revenue is $100 million.
In July, the platform will launch an AI tool to help buyers find the right products.
“As long as you have an idea, an intention or a picture, we can help you find the right sellers to make the right products,” Zhang said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice covering China and Asia for more than a century. For more SCMP stories, explore the SCMP app or visit the SCMP Facebook page Tweet Pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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