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Alibaba is teaming up with Beckham to break into the American market, which is no easy task.

TraderKnows
TraderKnows
05-27

Alibaba's e-commerce platform AliExpress is attempting to enter the North American market and has signed soccer star David Beckham as a brand ambassador.

Chinese giant Alibaba's e-commerce platform AliExpress has signed former England football team captain David Beckham as a brand ambassador to gain a competitive edge over Temu, owned by rival Pinduoduo, in the global sale of affordable Chinese-made products.

Previously operating quietly, cross-border e-commerce platform AliExpress is now actively investing to boost global sales amidst slowing domestic growth. Its international business unit, including AliExpress, was the fastest-growing segment, with a 45% year-on-year revenue surge between January and March.

Earlier this year, AliExpress also became a sponsor of the UEFA Euro 2024, scheduled to start in June. AliExpress plans to invest millions of dollars in discounts, promotions, and interactions to attract online consumers.

In a statement on Monday, AliExpress announced that an advertising campaign featuring Beckham would run in conjunction with the Euro 2024, encouraging consumers to "get more" via AliExpress.

Before this, Temu aired several ads during this year's Super Bowl, urging American consumers to "shop like a billionaire."

According to mobile intelligence firm Apptopia, Temu's app downloads surged by 34% on the day of the Super Bowl compared to the previous day.

Humphrey Ho, managing partner at digital advertising firm Hylink Digital's U.S. branch, noted that football fans in Europe and Latin America share many spending habits with American football fans in North America. They are generally price-sensitive and affected by inflation, which is why both Temu and now AliExpress are focusing on these soccer fans.

Competitive Landscape

Despite Alibaba long recognizing the potential of overseas markets, with founder Jack Ma stating in 2017 that Alibaba aimed to serve 2 billion global consumers by 2036, the company has had to catch up in many markets already dominated by Temu.

Momentum Works founder and CEO Jianggan Li said, "Historically, execution has been the bottleneck for Alibaba's international ambitions."

"Alibaba spent years debating whether competing with Amazon in the U.S. was too difficult, while Temu jumped straight into action."

Since its launch in 2022, Temu has quickly gained popularity in over 60 global markets by selling items such as $5 headphones and $10 dresses. Chinese investment management firm China International Capital Corporation estimates that Temu will reach $18 billion in revenue in 2023.

Pinduoduo does not disclose Temu's revenue separately and does not comment on the accuracy of third-party sales estimates.

To better compete, Alibaba is leveraging its competitive advantages by offering five-day delivery services for some products in 11 markets, supported by its investments in global logistics.

The repurchase of logistics subsidiary Cainiao in March this year may enhance AliExpress's logistical edge.

Currently, AliExpress operates in over 100 global markets.

Li Jianggan stated that Alibaba has both the willingness and the funds to drive AliExpress's growth. More importantly, the competitive landscape is forcing changes, altering the dynamics of Chinese cross-border e-commerce.

"AliExpress must find ways to compete with Temu and differentiate itself to win market share," Li Jianggan said.

"There is no other choice."

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