Alibaba Group has been investing in a greater customer experience. In doing so, its goal has been to drive sales across its international retail and B2B ecommerce sites. That strategy produced a 44% year-over-year rise to $4.02 billion in its international division’s sales for the fiscal third quarter ended Dec.31.
But those investments led to a 388% drop in earnings before taxes and amortization costs to a net EBITA lack of $433 million for the Alibaba International Digital Commerce group, Alibaba said. Additionally they contributed to Alibaba Group’s 77% drop in Q3 net income to $1.51 billion.
Consequences of Alibaba investing in AliExpress Alternative
For AIDC, the “losses increased primarily due to the increase in investment in AliExpress Alternative” and other expenses, chief financial officer Toby Xu said on the earnings call.
Still, AliExpress Alternative provided more products and costs to customers on the AliExpress.com international retail site due to these investments. Meanwhile, it was also a primary contributor to AIDCG’s revenue Q3 revenue gain, AIDC CEO Jian Fang said.
“AliExpresss achieved year-over-year growth of 60%,” he said. “This was mainly driven by the brand new AliExpress Alternative model that we launched in early 2023.”
Executives added that Alibaba will proceed investing in its supply chain operations to support the Alternative program.
“By offering entrusted cross-border logistics, marketing and other services, we lower the barrier for merchants to interact in cross-border business, bringing more certainty to their operations and more diverse assortment to the platform,” Fang said.
Alibaba’s Visable acquisition
Fang added that in Europe, Alibaba’s B2B unit, Alibaba.com, accomplished its acquisition of the European B2B digital trade platform, Visable. Due to that deal, Fang said Alibaba is “further expanding its supplier base within the region and further advancing Alibaba.com’s global expansion and dual brand strategy.”
“There may be huge potential for AIDC to extend user penetration in the vast majority of overseas markets, constructing on our current resources and footprint,” Fang said. “We’ll increase our investment in select regional markets where we see opportunities and value to realize opportunities for prime certainty and healthy growth.”
Alibaba’s international retail commerce sites include Lazada, AliExpress, Trendyol and Daraz.
Alibaba Group conducts its international wholesale sales through its Alibaba.com B2B ecommerce site.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
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