Alibaba's B2B e-commerce platform eyes 20% growth in 2024, shrugs off rising competition

Alibaba.com, a business-to-business (B2B) cross-border e-commerce platform owned by Alibaba Group Holding, is projecting US$60 billion in gross merchandise value (GMV) for 2024, which would be a 20 per cent increase over the US$50 billion last year, the platform's president Zhang Kuo said.

The sourcing platform's turnover growth slowed after a sevenfold increase in GMV over the previous five years, Zhang told the South China Morning Post in an interview in Hong Kong on Thursday.

"It's quite hard to double GMV every single year due to an increasingly large base," he said. "The core issue is about the business model, as we need to make new breakthroughs and transformations."

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Alibaba.com president Zhang Kuo attends the Greenwich Economic Forum in Central on June 6, 2024. Photo: Edmond So alt=Alibaba.com president Zhang Kuo attends the Greenwich Economic Forum in Central on June 6, 2024. Photo: Edmond So>

Alibaba.com started in 1999 as an online yellow book to help overseas bulk buyers find Chinese manufacturers. It is now largely functioning as a transaction platform that directly links Chinese suppliers with foreign businesses. Alibaba.com is part of Alibaba International Digital Commerce Group, one of the growth engines for Alibaba Group, the owner of South China Morning Post.

Chinese merchants on the platform saw the combined value of their exports reach US$350 billion last year, or roughly 10 per cent of the value of all Chinese exports, which increased 7 per cent in 2023 to US$3.6 trillion.

Alibaba.com has more than 200,000 suppliers, 90 per cent of whom are based in China. Half of the products offered on the platform are not for consumer use, according to Zhang. These include machinery tools, construction materials, laser cutting devices and even small food trucks.

"The turnover of non-consumer goods is growing faster than consumer goods," he said.

While China-backed shopping apps such as Temu, owned by Alibaba rival PDD Holdings, are quickly winning overseas consumers, Alibaba.com is betting on growing demand for small businesses to source online.

"Actually there's no major direct competition with Temu or TikTok," Zhang said, referring to the ByteDance-owned short video platform's recent push into e-commerce. "They are affecting a lot of the traditional small retailers in overseas markets ... but we believe in the importance of local ecosystems."

Alibaba also runs a number of consumer-facing apps, including Lazada and AliExpress.

On Thursday, Alibaba.com announced the launch of Alibaba Guaranteed, a service designed to make B2B sourcing as easy as shopping on sites like Amazon.com. Through the service, products will be offered at fixed prices with shipping fees included and guaranteed delivery times.

For sellers, the service is similar to a model known as "half-custody", in which suppliers outsource shipping, delivery, payment and client services to the platform. Zhang said lowering the barrier to foreign trade encourages Chinese merchants to directly pursue foreign buyers, as these companies typically do not have the ability to deal with complicated cross-border trade procedures themselves.

In Yiwu, a city in eastern Zhejiang province known for small manufacturers, the number of Alibaba.com clients increased 70 per cent in the last two quarters.

Alibaba.com has also been rolling out artificial intelligence (AI) tools such as an on-site chatbot to help exporters.

Last October, it introduced an AI tool to help users display goods online and to manage correspondence with clients. The tool's annual recurring revenue has reached US$100 million, according to Zhang.

In July, the platform will launch an AI tool to help buyers find the right products.

"As long as you have an idea, an intention, or a picture, we can help you to find the right merchants to make the right products," Zhang said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.