Why Alibaba Group Holding Ltd (NYSE:BABA) Is Expanding In Europe


Alibaba Group Holding Ltd (NYSE:BABA) is expanding its international footprint in Europe. The company is hoping to draw more foreign merchants to sell in China through its marketplaces. However, the expansion in Europe by Alibaba is coming at a time when the company is also struggling to save its image as its online shops become infested with counterfeits goods.

Alibaba Group Holding Ltd (NYSE:BABA)’s latest wave of global expansion is targeting Europe. The company has made London its European hub and appointed a former Wal-Mart Stores, Inc. (NYSE:WMT) executive, Amee Chande, as its managing director for the U.K. and Europe operations.

Country offices

As part of its expansion in Europe, Alibaba intends to open country offices in select European countries including Germany, France and Italy.

Gateway to China

Alibaba’s interest in Europe is the same one it is showing elsewhere – becoming the online access route for international brands seeking a pie of China’s rapidly burgeoning e-commerce market. In Europe, the company is calling on international vendors to identify the best products that they can sell to Chinese.

Country pavilions

Alibaba Group Holding Ltd (NYSE:BABA) has created special shops within its various online marketplaces to foster cross-border trades on its platform. On Tmall, the company has created what it calls “country pavilions” that allow Chinese consumers to sample popular products from different countries.

International brands on Alibaba

Alibaba’s international expansion efforts have been able to rope in global brands such as Costco Wholesale Corporation (NASDAQ:COST), Topshop, Burberry and Sainsbury’s.

Jack Ma added to Cameron’s business advisory group

The announcement about Alibaba’s latest expansion in Europe coincides with the state to the U.K. by China’s President, Xi Jinping. On the eve of Jinping’s visit, the U.K. premier David Cameron has included Jack Ma in his business advisory team.

The counterfeit problem

As much as Alibaba Group Holding Ltd (NYSE:BABA) is doing its best to cast itself as the gateway to China, the company is dogged by serious problems. Sale of counterfeit goods on the platform is not only turning away vendors and shoppers, but also hurting the reputation of Alibaba. In the U.S., for instance, a trade group is calling for reclassification of Alibaba’s counterfeit infested Taobao as a notorious market for fake goods.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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