Saudi consumers give online retailer AliExpress boost in Middle East market

Chinese e-commerce AliExpress has started offering several new services due to the increasing amount of purchases from the region. (AliExpress)
Updated 14 November 2019

Saudi consumers give online retailer AliExpress boost in Middle East market

  • AliExpress currently delivers to more than 200 countries and can be used in 18 languages
  • Around 60 percent of the consumers are below the age of 35, with 51 percent being female

DUBAI: Due to the increasing amount of purchases from the region, the Chinese e-commerce AliExpress has started offering several new services.
The growing demand came specifically from Saudi Arabia and the UAE, where the retailer started offering consolidation of orders for cheaper delivery and cash on delivery as a payment option.
These services were tailored to consumers from the region, as the company knew “cash on delivery is very popular in Saudi and UAE,” according to AliExpress’s Middle East head, Matt Zhang.
The retailer, which is under the Chinese Alibaba multinational conglomerate, is also trying to expand its provided local services.
“We have an overseas warehouse in Dubai. We are trying to open a warehouse in Saudi. We are in the process of all the legal and facility planning,” Zhang said.
Sellers will have the chance to use this facility, which is usually stocked with high-demand items, to decrease delivery times.
They also use the local delivery company Aramex in Saudi Arabia and the UAE to decrease the amount of time required for orders to reach consumers.
“Cainiao works with local partners” to enhance the buying experience, Zhang added. Cainiao is a technological company and the logistics arm of Alibaba group, providing the various businesses under the conglomerate with a variety of solutions locally and globally.
All of these additions follow AliExpress’s main strategy to expand in the region, which is to provide “a good selection, more competitive price and good service,” Zhang said.
The e-commerce company has been working with a marketing agency for the region as well, as they believe they need “more local insights,” he added.
For consumers in Saudi Arabia, their top three categories for shopping are consumer electronics, home and garden, and phones and accessories.
One of the reasons why consumers choose to buy such items from AliExpress is the value for money they get in exchange.
Buyers and sellers are now able to skip the tedious process of export and import through warehouses and distribution centers, which shortens the whole value chain and provides the same goods for a smaller amount of money.
Another interesting defining factor of consumer behavior in Saudi Arabia is the tendency to explore more options under each category compared to other countries.
The top three categories make up less than 40 percent of the ordered products, leaving the remaining more than 60 percent scattered over a long list of sub-categories.
On top of AliExpress, Alibaba is penetrating the regional market in other ways too.
If you have noticed the recent 11.11 sales and offers, they have been inspired by a decade-long shopping festival in China.
Although 11.11 is just starting to bloom in the region, it is a long-established event in China featuring a variety of entertainment and shopping events.
The famous US singer, Taylor Swift, performed at Shanghai’s Mercedes-Benz Arena during this year’s gala event for the shopping festival.
Several local retailers offered discounted items, ranging from baby care products, to groceries, to electronics and clothes.
At the end of the 24-hour shopping festival, Alibaba’s gross merchandise value (GMV) surpassed $38 billion, according to the company.
Alibaba reported that over 215 leading international brands, like Lancome and Shiseido, debuted one million new products, with over 240 11.11 themed items, during the 2019 festival.
The conglomerate is currently focusing on new retail in China, or as they have explained, an offline and online shopping experience. Tmall customers can view products online, and either buy them through delivery of find the nearest outlet to check the items in real life.
They are also undertaking new ventures in the country, such as the Flyzoo hotel in Hangzhou, which is fully automated and is operated by robots.
AliExpress currently delivers to more than 200 countries and can be used in 18 languages. Around 60 percent of the consumers are below the age of 35, with 51 percent being female.
Currently, the countries with the highest GMV are Russia, Spain, France, Poland and Brazil.
The retailer is also working on offering more international businesses to operate on their website and sell products. The service has already been launched in Russia and Turkey.

France ready to take Trump’s tariff threat to WTO

Updated 08 December 2019

France ready to take Trump’s tariff threat to WTO

  • Macron government will discuss a global digital tax with Washington at the OECD, says finance minister

PARIS: France is ready to go to the World Trade Organization to challenge US President Donald Trump’s threat to put tariffs on French goods in a row over a French tax on internet companies, its finance minister said on Sunday.

“We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches US companies in the same way as EU or French companies or Chinese. It is not discriminatory,” Finance Minister Bruno Le Maire told France 3 television. Paris has long complained about US digital companies not paying enough tax on revenues earned in France.

In July, the French government decided to apply a 3 percent levy on revenue from digital services earned in France by firms with more than €25 million in French revenue and €750 million ($845 million) worldwide. It is due to kick in retroactively from the start of 2019.

Washington is threatening to retaliate with heavy duties on imports of French cheeses and luxury handbags, but France and the EU say they are ready to retaliate in turn if Trump carries out the threat. Le Maire said France was willing to discuss a global digital tax with the US at the Organization for Economic Cooperation and Development (OECD), but that such a tax could not be optional for internet companies.

“If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” Le Maire said.

He added that new EU Commissioner for Economy Paolo Gentiloni had already proposed to restart such talks.

France pushed ahead with its digital tax after EU member states, under the previous executive European Commission, failed to agree on a levy valid across the bloc after opposition from Ireland, Denmark, Sweden and Finland.

The new European Commission assumed office on Dec. 1.