Alibaba Group Holding Ltd. is undercutting Amazon.com Inc.'s seller fees that it charges in Europe in a bid to attract third-party merchants in the region, Reuters reported Jan. 7, citing six sources with direct knowledge of the matter.
The Chinese e-commerce giant is ramping up its expansion plans in Europe over the recent months with the reported launch of its first European brick-and-mortar store in Madrid in August 2019 and the reported establishment of its retail team in the U.K. in November 2019.
Sources reportedly told Reuters that a number of small businesses have already signed up for Alibaba's European platform, AliExpress, in recent months. Reuters added that Alibaba is looking at initially launching in Spain, Italy, Russia and Turkey.
A senior source close to the company reportedly said the online retailer has waived monthly seller rates in Spain and set commissions for goods sold at 5% to 8% in order to attract business. This is compared with the monthly fee of €39 plus sales tax that Amazon charges its sellers, plus a 7% to 15% commission for every item sold, a spokeswoman told the news agency.
The news outlet said Amazon declined to comment on AliExpress' plan to open its site to European sellers.
AliExpress has also approached larger brands, including Mango, Benetton and Spanish fashion group Tendam, to be available on its website with limited access, the report said, citing five of the sources. However, some of the brands reportedly are hesitant to join, with one executive saying the platform is "a work in progress."
The report said Benetton and Tendam declined to officially comment on whether they were approached, while Mango said it did not sell on AliExpress with no further comment. An AliExpress spokeswoman did not comment on whether the company had approached these brands or others.
"We are continuously exploring opportunities to work with different partners and committed to acting as a trusted partner for both consumers and sellers," AliExpress reportedly said.
Meanwhile, AliExpress head Wang Mingqiang told Reuters in an interview that foreign brands needed time to understand the e-commerce platform.