Text: Wang Huiying
Edit/Midnight
On May 14, Alibaba released its Q4 and full-year results for fiscal year 2024. In the quarter, the revenue of Alibaba International Digital Commerce increased by 45% year-on-year to 27.448 billion yuan, exceeding market expectations for seven consecutive quarters.
This financial report is also the first financial report released since AliExpress officially launched the "semi-custodial" business in January this year.
According to the financial report, in April 2024, Choice orders based on fully managed and semi-managed businesses accounted for more than 70% of AliExpress's overall orders.
One trend is that as the domestic e-commerce market has approached the ceiling, it has become a consensus that Chinese e-commerce platforms have begun to look for increments overseas.
AliExpress is a big variable in this market, and its particularity lies in the fact that it covers a wider range of merchants, including full custody and semi-custody and other models.
When the fully managed model became the industry standard, AliExpress discovered the different needs of merchants and consumers, and first launched the semi-managed model, so that more merchants can increase the number of orders and let consumers receive goods faster.
In less than half a year, multiple platforms have launched semi-managed models one after another. The complement of the semi-custodial model allows Chinese cross-border e-commerce platforms to compete with mature foreign cross-border e-commerce platforms in terms of category richness, price and efficiency.
In South Korea, there are Tang Wei and Ma Dongxi endorsements; Became the first e-commerce sponsor of the European Cup in Europe; Invite Asian Footballer of the Year endorsement in the Middle East...... AliExpress will further increase investment in overseas markets and expand order growth space for China's most extensive cross-border merchants.
1. Running wildly again, AliExpress found a "fast runway"
Statistics from the General Administration of Customs show that in the first quarter of this year, China's cross-border e-commerce import and export was 577.6 billion yuan, an increase of 9.6%; Among them, exports were 448 billion yuan and imports were 129.6 billion yuan.
The growth momentum and development prospects of cross-border e-commerce are obvious to all, and a flexible and resilient supply chain model is the key to doing a good job in this business.
For a long time in the past, cross-border e-commerce platforms stood at a crossroads: fully managed or semi-managed? Alibaba's cross-border e-commerce business, AliExpress, chooses to do it all.
With the development of cross-border e-commerce, China's "Four Tigers Going to Sea" have kept up with the full custody model, and proved the feasibility of the full custody model through its achievements, but full custody is not applicable to all platforms and all merchants.
Yan Guanghui, who is mainly engaged in power tool accessories in Ningbo, has deep feelings. Yan Guanghui is an old seller who has been in contact with AliExpress since 2016, and his category is not common, mainly engaged in diamond tools in industrial machinery tools.
Source: Alibaba AliExpress WeChat public account
Last year, after AliExpress began to implement the semi-managed model, Yan Guanghui was the first batch of merchants to join, and after eating the semi-managed dividend, the order volume of Yan Guanghui's store increased from the original 70-80 orders per day, and soon broke through to 150-200 orders per day.
Since AliExpress officially launched the "semi-custodian" business in January this year, there are many cross-border merchants like Yan Guanghui, and the semi-custodian business has brought new growth and hope to niche category merchants.
"Some features are still being updated compared to when we first joined, and now it's time for merchants to upgrade to semi-managed services." Yan Guanghui did not hesitate to share his experience on custody with the cross-border merchants around him, so that they could increase their investment more confidently.
In the e-commerce industry, merchants choose platforms because they value the influence and service power of the platform, and it is even more rare to dare to increase investment.
Taking AliExpress as an example, in April this year, it launched the "10 billion subsidized brands going to sea" plan, which allows merchants to participate in the form of fully managed or semi-managed POP, and has been successfully settled in a number of well-known brands and large Amazon sellers.
According to Wired Insight, in May, AliExpress will also launch a super outbreak day, through the gathering of traffic and resources, in a simpler way to give merchants a more certain order outbreak.
Behind AliExpress's increased investment is a steady stream of merchants and orders. According to the latest financial report, in April 2024, Choice orders based on fully managed and semi-managed businesses accounted for more than 70% of AliExpress's overall orders.
The outstanding performance of AliExpress's business has allowed Alibaba's international business to continue to maintain a strong growth momentum. During the quarter, Alibaba International Digital Business Group's revenue increased by 45% year-on-year, and the overall quarterly orders of its retail platform increased by 20% year-on-year.
The financial reports of several consecutive quarters show that AliExpress has become the growth engine of Alibaba's overseas business. AliExpress's adjustment in the supply chain has enriched the supply of goods on the platform, stimulated user demand, and increased its confidence in the second half of the competition in cross-border e-commerce.
2. Find a partner to go to sea and speed up in an all-round way
When an order is shipped across the ocean to the consumer, physical distance is inevitable. A week's or even half a month's wait is the norm, and the timeliness behind this dissuades many consumers and slows down the pace of expansion of many businesses.
For the cross-border e-commerce industry, the efficiency of order fulfillment is the key to business success or failure. According to Wired Insight, the essence of AliExpress semi-custody is to help merchants host logistics fulfillment links, and the core is to "provide warehousing and logistics services for merchants at a lower cost".
Semi-custody retains the unique product advantages and operational advantages of the merchant's self-operation at the same time, which is equivalent to finding a balance between full custody and merchant's self-operation.
"Fast" is the consistent impression of consumers and merchants on AliExpress.
Mila from the Netherlands, a lover of Chinese culture, recently had her "Cao County Origin" horse face skirt delivered to her doorstep five days after placing an order, so that she could participate in the Chinese New Year event held in Amsterdam's Chinatown in time. Tracy, the British bride, received an embroidered wedding dress from Tiger Hill within a week, fulfilling her life event on schedule.
On the merchant side, Gu Rongjun, a furniture merchant from Xuzhou, Jiangsu Province, has been in contact with foreign trade and cross-border e-commerce business since 2015, and it has been nearly 10 years today. According to his recollection, if the super-large goods of merchants wanted to be sent to South Korea, they needed to purchase their own transportation resources, and the average performance time required 10-15 days, and the cost was high.
Nowadays, according to Gu Rongjun, now the logistics and distribution of the Korean market can be achieved "5 days", especially this year, a large furniture line has also been opened, and consumers can often receive positive feedback on logistics. "The improvement of logistics speed is the improvement of customer experience."
Indeed, logistics is a key factor affecting user experience and repurchase, and it is also the key to supporting the fast and differentiated performance of fully managed and semi-managed models.
Supporting AliExpress logistics is running faster and faster is the layout of rookies in global logistics. In the past year, Cainiao has focused on the development of global express delivery, global supply chain and integrated logistics technology, and has firmly increased its strategic investment in logistics for the global market.
Especially in the collaboration with international business groups, Cainiao is like a huge spider web, maintaining close cooperation with AliExpress, so that AliExpress's competitiveness has reached a new level.
According to the financial report, the "global five-day delivery" service cooperated by AliExpress and Cainiao has been expanded to ten countries; The delivery rate of cross-border parcels on 5 days and 10 days has doubled year-on-year.
This quarter, Cainiao expanded AliExpress's "worry-free priority" logistics to 4 new countries in Mexico, Poland, Italy, and Portugal, covering a total of 14 countries, and expanded the scope of application from fully managed merchants on the platform to fully managed and semi-managed merchants.
In addition, Cainiao also joined hands with AliExpress to open cross-border warehouses in Qingdao, Chengdu and Tianjin industrial belts, launched cross-border logistics lines for overseas brands, oversized items and clothing, etc., and provided cross-border sales and brand merchants with warehousing multi-platform delivery, door-to-door pickup and other services.
Thanks to the "Global 5-Day Delivery", consumers all over the world have felt the "China speed". However, in order to meet the complete consumption experience of consumers from purchase to after-sales, in addition to product supply and logistics speed, after-sales protection must also keep up. Previously, AliExpress also launched after-sales guarantees for consumers, such as "refund for overtime failure to deliver", "refund if lost", "refund if broken", "compensation for late", etc., to help merchants increase user repurchase.
As cross-border e-commerce competition enters the deep water area, logistics is undoubtedly the focus of competition among market players. With logistics as the foundation and speed as the starting point, the advantages of AliExpress and Cainiao's "going to sea" are becoming increasingly apparent.
3. Frequent actions and increase investment in overseas markets
After more than two years of running wildly, China's cross-border e-commerce market has proven to have great potential and is crowded with players who want to make a big splash. The "Four Tigers Going to Sea", represented by AliExpress, SHEIN, Temu, and TikTok, are trying to reshape a new consumer market overseas under the pressure of Amazon.
HSBC released the "Chinese E-commerce Giants Overseas Research Report" predicts that by 2027, the GMV of China's e-commerce "Four Tigers", including Temu, Alibaba International, SHEIN and TikTok, will exceed 100 billion US dollars. Chinese e-commerce companies are actively expanding their overseas e-commerce markets to seek new growth, and their GMV in overseas markets will increase to US$500 billion by 2025.
Among them, the global e-commerce penetration rate is expected to increase from 21% in 2022 to 23% in 2025, which is still far below the level of China's e-commerce market. This sends a signal that in the next few years, there is more room for growth in the cross-border e-commerce market, and the decisive point of China's e-commerce market is overseas.
Reflected in this Alibaba's financial report, the international business is still the fastest growing business, and after 7 consecutive quarters of rapid growth, AIDC's revenue contribution is stable in the second position, and the cross-border e-commerce business has performed well.
To achieve such results, AliExpress, based on the hosting model, continues to improve the shopping experience of consumers, and more importantly, it is inseparable from AliExpress's continuous investment in the market. The big ship of the platform is full of Chinese merchants and global consumers, especially in the face of emerging markets, AliExpress is also increasing market investment to build brand and influence.
Since the beginning of this year, AliExpress has signed actor Tang Wei as the latest spokesperson in the South Korean market, and in the Middle East, it has signed with famous Saudi stars Salem Al-Dawsari (Salem Dawasari) and Feras Al Brikan (Feras Buraikan) to become the Middle East spokesperson of AliExpress AliExpress.
In April, it was officially announced that it would become the official partner of the 2024 European Cup and the first e-commerce sponsor. During the competition, AliExpress will provide global consumers with preferential discounts on goods, interactive gameplay, and surprise prizes including race tickets.
AliExpress has partnered with Euro 2024
The growth of scale is also accompanied by the layout of logistics. According to Korean media reports, with the rapid growth of AliExpress in South Korea and the continuous influx of orders, AliExpress has expanded its cooperation with local logistics companies in South Korea and signed contracts with four leading logistics companies in South Korea, including CJ Logistics, Hanjin, Lotte Global Logistics, and Korea Post.
In this financial report, Alibaba said that in the future, it will invest more resources in cross-border e-commerce, reaffirm its price power and customer value proposition of timely delivery to global consumers. In 2024, cross-border e-commerce is destined to be a comprehensive battle of service, supply and traffic.