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China’s e-commerce giant makes itself at home in Latin America

June 29, 2015 04:30 PM

Alibaba Group, China’s dominant e-commerce company, has yet to make a major push into North America, but it’s making headway in selling goods from suppliers in China and other countries to online shoppers in Latin America.

Alibaba sells to consumers internationally through AliExpress.com, a site it launched in 2010, that sells goods in 40 categories directly to consumers in 200 countries, according to Alibaba. While Alibaba does not regularly disclose transaction volume on AliExpress.com, the company did report in advance of going public last September that the value of goods purchased on AliExpress.com exceeded $4.5 billion in the year ended June 30, 2014.

AliExpress has caught on in Russia, where Alibaba claims it’s the top e-retail site, and in Latin America. And the Chinese company is taking several steps to localize the site to better appeal to Latin American shoppers.

“Aliexpress.com grew fast in Latin America, especially in Brazil, Chile and Mexico. In Brazil, we are already among the top three e-retail sites, in terms of sales or brand awareness,” Bill Wang, director of emerging market operations at Alibaba, tells Internet Retailer.

The most popular merchandise categories in Latin America are wedding products, apparel, electronics and jewelry. 

Alibaba does not disclose its sales in Latin America. But web analytics company SimilarWeb estimates monthly visits from Brazil to AliExpress.com averaged 110 million during the first five months of 2015. 

Delivery remains a big challenge for e-commerce companies in Latin America, Wang says. “A Brazilian consumer normally must wait 40 days to receive the products after he or she placed order on Aliexpress.com,” he says. “It takes one to two weeks to ship the parcel from China to Brazil. But the time for passing through Brazilian customs and delivery inside of Brazil could take a total of 30 days. The time for custom clearance is still unpredictable and the delivery time inside Brazil is hard to track.”

Why do so many Brazilians shop on AliExpress if they have to wait a month to get their orders? “First, we provide a large product selection and also we can offer a much lower price as we connect producers with consumers directly,” Wang says. “Consumers in Latin America are used to shopping in advance, so they have enough time before they need the products.”

To speed up delivery, Alibaba has collaborated since last year with the Brazilian postal service Correios to share parcel data. AliExpress also accepts many local payment options in the region, including OXXO in Mexico and Boleto in Brazil.      

Aliexpress.com launched a Spanish-language version of its site in 2014 to boost sales. AliExpress last year also rolled out its first country-specific site, a Portuguese-language site targeting Brazilian consumers, at pt.aliexpress.com. The site enables merchants that sell on the web shopping mall to create customized promotions, such as deals based on local holidays.

The Spanish-language AliExpress.com also has sections that highlight suppliers Alibaba has authenticated, such as those from Chile and Peru, to increase consumer confidence in shopping on AliExpress.com. Those sections also enable local merchants to sign up to become authenticated on Alibaba’s sites. Besides Chile and Peru, there are similar sections of AliExpress.com highlighting merchants from Mexico, Colombia, Brazil and Argentina.

While expanding in Latin America, Alibaba last week sold off its initial U.S.-based online marketplace, 11Main.com.

For more information about cross border e-commerce companies, please click here for Internet Retailer China 500, or click here for Internet Retailer Latin America 500. Follow Frank Tong on Twitter @FrankTongIR.

 

 

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