China’s dominant e-commerce company is helping Chinese companies sell billions of dollars’ worth of merchandise each year to online shoppers outside of China.
The AliExpress online marketplace that Alibaba Group Holding Ltd. created in 2010 to facilitate sales from Chinese manufacturers and wholesalers to overseas consumers generated $4.5 billion in sales in the 12 months between June 30, 2013, and June 30, 2014, Alibaba executives told investors this week as they line up buyers for Alibaba shares that will go on sales soon on the New York Stock Exchange. That sales figure was reported by a source who attended an Alibaba presentation. Alibaba declined to comment as it is in a quiet period ahead of the IPO, which is expected to take place this month.
Alibaba has previously reported in its filings with the U.S. Securities and Exchange Commission that its revenue from AliExpress has been growing rapidly. Alibaba takes a 5% commission on AliExpress sales and also charges sellers for marketing services. The company’s revenue from AliExpress doubled in the quarter ended June 30, 2014, from the year-ago quarter, to 358 million yuan ($58 million) from 179 million yuan ($29 million.)
AliExpress remains a small part of Alibaba’s business. By comparison, the company reported that the total value of goods sold on its marketplaces during the quarter ended June 30, 2014 was $81.6 billion.
But $4.5 billion in annual sales would put AliExpress on its own one in the league of some of the larger international web shopping portals. For example, MercadoLibre, the dominant online marketplace in Latin America, generated $7 billion in gross merchandise sales in 2013 and Rakuten, the operator of the largest web shopping mall in Japan and online marketplaces in the U.S. and Europe, generated gross merchandise value of about $18 billion that year.
Alibaba says the growth in sales on AliExpress comes from the increasing number of buyers, particularly from the United States, Russia and Brazil. The most popular product categories on AliExpress are electronics, apparel, home, jewelry and automotive.
Aliexpress.com provides translation into 80 languages and offers shipping to 220 countries outside of China.
A variety of major carriers provide international shipping services for AliExpress. They include TNT, EMS, UPS, FedEx, DHL, China Post, Hongkong Post and SF Express.
Besides AliExpress, Alibaba operates four online retail marketplaces geared that allow retailers and brands sell to Chinese online shoppers. They are the Taobao, where more than 8 million Chinese companies sell; premium brand marketplace Tmall, which has about 70,000 storefronts; group-buying marketplace Juhuasuan and Tmall Global, designed to facilitate the sale of imported goods to Chinese consumers.
While the vast majority of its revenue comes from sales in China, Alibaba also launched in June an online shopping portal called 11Main.com where U.S. merchants can sell to U.S. consumers.