Experts of economics and international trade discuss the 10-year development of AliExpress during a seminar held on January 13 in Hangzhou (COURTESY PHOTO)

"The establishment of AliExpress could help Chinese entrepreneurs, especially small and medium-sized enterprises (SMEs), weather the recent difficult trade situation," said Wang Luo, a senior researcher with the Chinese Academy of International Trade and Economic Cooperation during a seminar held in Hangzhou on January 13.  

In her view, the operation of cross-border e-commerce platforms has promoted the transformation and upgrading of China's trade structure, especially the branding of SMEs. 

AliExpress, under Alibaba Group, is the only cross-border retail e-commerce platform for the global consumer market. It was established in 2010 and will celebrate its 10th anniversary this year. It has sites in 18 languages and serves consumers in more than 200 countries and regions around the world. Russia, Spain, the United States, France, and Poland are its top five markets. In Russia, AliExpress is the largest local e-commerce platform, with an average of one in six Russians using the service. 

According to Wang Mingqiang, General Manager of AliExpress, the e-commerce site has gone through three stages in its development over the past 10 years.  

AliExpress developed from Alibaba's earliest traditional B2B site. In 2008, when the global financial crisis hit the world, the number of orders from overseas buyers sharply decreased. Therefore, in the first two or three years of its establishment in 2010, AliExpress was mainly a small wholesale business. At the time, the products sold were mainly products without trademarks. 

The second phase began in 2013, and AliExpress switched from small size wholesale to a B2C platform. At this stage, the platform began to invest resources to recruit Chinese brands, and invested in localization in some key countries, such as Russia, to help them enhance logistics, payment and other e-commerce infrastructure capabilities. Driven by AliExpress, Russia Post's delivery time has been shortened from dozens of days to up to five to seven days. 

From 2017 to the present, AliExpress has developed in a diversified way. Applying China's advanced e-commerce-based artificial intelligence capabilities to global business and matching demand and supply in different countries are the major goals of AliExpress. 

"One of the advantages of AliExpress is that it relies on the big data and product technology capabilities of Alibaba Group," Wang noted. 

Many SMEs on AliExpress have also completed the transformation and upgrade of their own brands in the past 10 years. 

Deko is one of them. As one of the tens of millions of traditional export companies in China, Deko started as an OEM company in Ningbo City, in east China’s Zhejiang Province. With intensified competition and understanding of the huge price gap between wholesale prices and overseas terminal retail prices, Deko entered AliExpress in 2015 and created its own brand. 

"In fact, there are many companies like us in China, especially in Zhejiang Province. If you want to build a brand, the threshold is very high and you have to pay a lot of money. However, with AliExpress, I think we built our brand at a relatively lower price," said Feng Jun, head of Deko at the seminar. 

According to Feng, Deko now directly connects its consumers, cuts off all the intermediate links and thus provides consumers with the lowest price. Meanwhile, through direct contact, consumers' feedback could be obtained in a timely manner, and rapid improvement can be made according to the different needs of consumers in each country.  

Deko also deployed overseas warehouses to better serve consumers in a B2B2C manner. At present, many overseas supermarkets have come to Deko to take the initiative to sell their products overseas, which was unimaginable in the OEM era.  

Deko's Double 11 shopping festival global sales grew from $9,992 in 2015 to more than $3 million in 2019. Feng said that AliExpress had provided SMEs with opportunities to achieve rapid growth. 

Wei Hao, Director of the Department of International Economics and Trade of Beijing Normal University, believes that under the current overall economic downturn both at home and abroad, cross-border e-commerce platforms are helping Chinese companies go global. 

Wei said, "This is not only beneficial to China's manufacturing industry upgrade, it also strongly supports the country's major strategy of 'stabilizing export', encouraging enterprises to diversify export markets." 

Wei also pointed out that since the reform and opening up, many Chinese enterprises have participated in the international division of labor in the form of foundry. Although it has promoted China's economic growth and created a Chinese miracle, China is mainly engaged in processing and production. It is difficult to expand at both ends of the chain. 

"Now our enterprises export through cross-border e-commerce platforms, which can help Chinese companies break through foreign countries' restrictions and avoid falling into the trap of global value chains," Wei said. "It will help China's manufacturing industry accelerate its high-quality development." 

It is beneficial for Chinese SMEs to generate more profits and achieve technology and quality upgrades, which will promote the high-quality development of China's overall economy and a new round of high-level opening up, according to Wei. 

Lu Yue, Associate Professor with the WTO Research Institute of the University of International Business and Economics, believes the AliExpress model breaks the fixed cost and provides convenience for more enterprises.  

According to Lu, in traditional trade, there is a fixed cost to enter overseas markets, including costs in logistics, operations, and localized operations.   

"The AliExpress model has helped the high-quality development of China's manufacturing industry, especially the transformation of the traditional foundries into companies that can build their own brands and go global," Lu said. 

Fu Dahai, Associate Professor of the Central University of Finance and Economics, said AliExpress is a big platform to promote the international development of global SMEs. 

Fu believes that the cross-border e-commerce platform is a high-speed way for Chinese and foreign companies to participate in international trade, through which not only have Chinese products been introduced to the world, but also foreign consumers have enjoyed the dividends of China's rapid development.  

(Reporting from Hangzhou, Zhejiang Province) 

Copyedited by Madhusudan Chaubey  

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