AliExpress sales in Europe are declining
International marketplace AliExpress continued its sales decline in the third quarter of this year. According to the company, this is due to a drop in orders following the entry into force of new EU VAT rules. Overall, the Alibaba Group reports a loss of 2.8 billion euros.
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AliExpress is the business-to-consumer subsidiary of Alibaba Group. It is known for its low prices and long delivery times. Last year it launched a logistics solution in Europe that offers a 10-day delivery guarantee.
Low market share in Europe
Chinese e-commerce company Alibaba invested in expansion in Europe through its Southeast Asian offshoot Lazada. But even though Alibaba has been in the region with AliExpress for over a decade, its overall track record hasn’t been great.
Last year, the site had a market share of just 4 percent in western Europe, well behind Amazon’s 20 percent, data from Euromonitor International shows. In Eastern Europe, the 5 percent share also lags behind Russia’s Wildberries and Poland’s Allegro.
Revenue of $29.1 billion
Alibaba Group announced its financial results for the third quarter this week. Total sales were $29.1 billion. This is growth of 3 percent compared to the same period last year.
International orders fell by 3%
Internationally, the group seems to be slowing down. “During the September quarter, the combined number of orders from Lazada, AliExpress, Trendyol, and Daraz decreased 3 percent year-over-year, primarily due to declining orders from Lazada and AliExpress, partially offset by strong trendyol order growth,” it said it says in a press release.
‘AliExpress continues to face challenges in cross-border e-commerce demand in Europe.’
“During the quarter, the decline in AliExpress orders slowed compared to previous quarters as the impact of European Union VAT regulations were annualized.” will continue to face challenges in cross-border e-commerce demand in Europe.