Alibaba Woos European Brands as it Undercuts Amazon

China’s retail giant, Alibaba, has intensified efforts to make its presence felt in Europe. Recent reports revealed that the company wants to undercut Amazon seller’s fees to gain vendors. However, the report revealed that the decision has not been very favorable for the company.

Already, Alibaba’s European platform, AliExpress, has attracted some small businesses. But it has not been able to attract bigger brands yet. The bigger brands are still not convinced that the company’s platform will provide the much-needed boost they want.

AliExpress has approached popular brands

Recently, AliExpress approached popular brands, including Cortefiel, Tendam (Spanish Fashion group), Benetton, as well as Mango. The company met with them to start doing business on the AliExpress platform, but the outcome of the meeting was not successful. Some of the top brands are not convinced of offerings on the platform. According to some of them, the offerings on the portal, which included a $14 batwing sweater and an $18 imitation leather miniskirt, are not the rightful representation of the type of products they have.

One of the senior executives of the companies that turned down AliExpress’s offer pointed out that the platform is still a developing one. He reiterated that the platform does not offer the kind of service its company has grown used to. As a result, their product listing on the site may not work for now.

Another executive said the AliExpress port is still a “work-in-progress.” He stated that there are many improvements the portal needs to make before his company can decide to register with the platform.

Foreign brands need time to understand the platform

Speaking about the rejection, Wang Mingqiang, who is the head of AliExpress, stated that foreign brands are a bit skeptical about joining AliExpress because they have not understood the platform.

He said the platform offers a unique approach for them to sell their brands because it gives them the avenue to create their design within the platform. According to Mingqiang, brands can design their own homepage and add whatever videos and pictures they want. They can customize their brand on the platform and put out their products the way they want.

Both Tendam and Benetton refused to comment on whether AliExpress approached them. Both brands sell on Amazon, but neither of them sells on AliExpress. Mango does not sell on Amazon or AliExpress.

A spokeswoman of the AliExpress brand didn’t answer questions regarding the approach. She declined to comment on whether AliExpress approached these companies or not. However, she hinted that the company is always exploring opportunities and is committed to partnering with different brands for both sellers and consumers. In the past, Alibaba had used AliExpress to sell less affordable Chinese items on AliExpress. But it seems the company wants to expand its reach to target companies offering European and American products. To do that, it will be in a big competition with Amazon, which has been covering that market for some time.

The company has also opened up its business model to attract local brands and vendors, as it wants to use a highly incentive business model for virtual malls.

Initially, the company targeted Italy, Spain, Turkey, and Russia for its phase one European business model rolled out in 2010. Now it wants to include several other European countries in the next phase.