Alibaba to increase investment, globalisation top priority

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By Larry Banks

Alibaba will invest heavily in new and existing ventures abroad, making a push beyond China a top priority, CEO Daniel Zhang said recently.

His comments come at a time when the company aims to continue its phenomenal growth as the prospect of e-commerce saturation at home looms.

Alibaba to globalise

“We must absolutely globalise”, said Zhang in his first speech since taking up his new role this week, according to a report on Alibaba’s news and commentary website, Alizila.

Most of Alibaba’s revenue is from its domestic online stores, but it’s also been investing in many sectors abroad, such as a new cloud computing base in Dubai, as well as boosting its stake in US company Zulily Inc.

“We will organize a global team and adopt global thinking to manage the business, and achieve the goal of ‘global buy and global sell'”, Zhang said.

Alibaba, which handles more transactions on its platforms than Amazon.com Inc and eBay Inc combined, would continue to invest heavily in new and existing overseas operations, Zhang was quoted as saying. Those included AliExpress, a platform for overseas consumers to buy Chinese goods, and Tmall Global, a marketplace for overseas goods to be sold online in China.

Growth of Alibaba’s international business is somewhat behind the pace of growth in China, as the new CEO faces the prospect of slowing domestic growth as saturation among online shoppers threatens to limit expansion.

In the three months ended March, Alibaba’s revenue from China commerce grew 39 percent to $2.2 billion. International commerce grew 27 percent to $264 million and only accounted for 9 percent of revenue, compared to 11 percent in the same period a year earlier.

Alibaba says some of its larger overseas markets include Brazil and Russia. The company and its affiliates are also making overtures in India, where it is in talks with phone maker Micromax Informatics to buy a $1.2 billion stake, according to several people with direct knowledge of the matter.

For the United States, Alibaba is planning a major move to win business this year, by offering American retailers new ways to sell to China’s vast and growing middle class.

SOURCE: Reuters

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