The Chinese ecommerce giant Alibaba Group Holding Ltd (NYSE: BABA) recently announced that it is planning to establish an office in Australia—its very first local office in the country—during the latter part of the current year. This move by the ecommerce corporation can be considered as a part of its broader move to globalize and reach its goal to gain more than half of its revenues from countries outside its home country by the year 2036.
The global president of the Alibaba Mr. Michael Evans stated that Australia was a significant part of the long-term globalization push of his ecommerce company. Alibaba aims to boost its 423 million clients to about 2 billion customers in another decade, as it grows its global presence.
Mr. Evans said, “Australia and New Zealand are a big part of our globalization strategy. In markets that are very important to us, we want a good group of people working for us.”
“The e-commerce business, reportedly worth $200 billion, currently has eight staff in Australia. However, with plans to open up its first office in the city of Melbourne by the end of 2016, Alibaba will target Australian consumers as it plans to boost its business over the next three to five years,” he further added.
The Chinese ecommerce conglomerate pointed out several times that it intends to establish and transform itself into an international e-commerce service. By doing so, customers will be able to purchase goods from wherever they want in the world.
As the ecommerce market of the Asian country grows at a sluggish pace, market analysts assert that the implementation of a more international strategy was required for the company to sustain its bullish momentum.
According to the Shanghai Wangqing Consultancy analyst Mr. Lu Zhenwang, the number of online shoppers in China may have already hit its peak.
“So it makes sense for Alibaba to expand its customer base through globalization,” the analyst stated.
Furthermore, Mr. Evans stated that businesses in Australia will be well placed to take advantage of Southeast Asia’s spending boom.
“We connect with about half a million consumers here. They are actually not all Chinese-speaking consumers,” he noted.
Mr. Evans further added, “We are going to engage in e-commerce going both ways, export to foreign markets, import to Australia.”
According to the Alibaba global president, the majority of the dealings of Australia with the Chinese ecommerce titan is focused around milk powder.
Approximately 1,400 Australian brands sell on the online platforms of Alibaba and around 80% of these products had never penetrated the Chinese market before establishing e-shops.
As of 5:40 AM GMT -4 on July 20, the BABA stock is changing hands at $82.77, up by 0.15 percent or 0.12 points. Currently, the market capitalization of the Chinese ecommerce company stands at 208.30 billion and its P/E ratio posts at 19.95.