Alibaba undercuts Amazon in Europe to woo wary brands

guest · Jan 7, 2020

Alibaba undercuts Amazon in Europe to woo wary brands
January 8, 2020
https://www.reuters.com/article/us-...on-in-europe-to-woo-wary-brands-idUSKBN1Z7045

After years of reconnaissance, China’s retail king Alibaba is finally making its move on Europe. It is undercutting Amazon sellers’ fees to attract vendors but has had mixed results, six sources with direct knowledge of the matter said.
A flood of small businesses have joined its European platform, AliExpress, in recent months but some larger brands are holding back, according to the sources.

However the head of AliExpress, Wang Mingqiang, told Reuters in an interview at Alibaba’s headquarters in Hangzhou, that foreign brands needed time to understand the platform.

But in the past six months it has started a drive to open up the platform to local vendors and brands as its seeks to replicate a highly profitable model of virtual malls that has seen it swallow more than half of online sales in China.

“Overseas sellers have a better understanding of local users, their products have better designs as they are closer to local users,” said Wang.
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MONTHLY FEES WAIVED
AliExpress has waived monthly rates for sellers in Spain to attract their business while commissions for goods sold are set at 5% to 8%, according to a senior source close to the company.
By comparison, it costs 39 euros per month plus sales tax to sell on Amazon, plus a commission for every object sold of 7% to 15%, with some items like jewelry and Amazon device accessories commanding higher rates, an Amazon spokeswoman said.

Amazon declined to comment on AliExpress’s move to open its platform to local sellers.
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