Alibaba Group Holding Ltd (NYSE:BABA) is banking on its growth in China to compete with Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY) in the international theater, A.T. Kearney Senior Partner Gan Chee Wee told Bloomberg in a segment of First Up.
The comment about Alibaba Group Holding Ltd (NYSE:BABA) which has been often compared with Amazon.com, Inc. (NASDAQ:AMZN), seen as its prime rival from the U.S., and other electronic commerce companies like eBay Inc (NASDAQ:EBAY) comes as the company is expected to have shattered its records for its Singles Day shopping event this year.
“I think Alibaba is certainly leveraging much of its growth domestically in China. You see its expansion that it’s going internationally, it’s about connected consumers into and out of China,” the executive said.
Gan Chee Wee said that for example, Alibaba Group Holding Ltd (NYSE:BABA)’s AliExpress is designed to help consumers outside of China connect and do business with merchants in China. Meanwhile, Tmall Global is Alibaba’s way of connecting consumers in China to retailers outside of the country.
Nonetheless, Wee said that whether these properties and these strategies can get Alibaba Group Holding Ltd (NYSE:BABA) over Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY) remains to be seen.
Wee said, however, that this two-pronged attack highlights how Alibaba Group Holding Ltd (NYSE:BABA) is leveraging its strengths against Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY).
Meanwhile, in another part of the interview, the executive said that there are three factors driving the 25% growth year-over-year of electronic commerce in China. These factors are internet penetration, mobile commerce growth, and commerce growth in lower-tier cities.
He said that Chinese internet penetration is still below half of the population (46%) which presents a lot of room to grow. Mobile commerce, he added would grow from the 1.5% of all commerce in the country in the last year. Meanwhile, lower-tier cities will flock to online retail as brick-and-mortar stores cannot adequately support their demands, he said.
eBay Inc (NASDAQ:EBAY) shareholders, on the other hand, includes Carl Icahn’s Icahn Capital Lp which reported owning about 30.8 million shares in the company by the same period.