US Insights

Why Alibaba's First European Store Matters

Malcolm Pinkerton

Vice President

Retail 08.27.2019 / 12:00

Alibaba sennep 430

The eCommerce giant is testing the waters of European commerce with its first physical store in Madrid.

Alibaba is continuing its quest to become a truly global omnichannel giant. The latest venture sees the eCommerce giant testing the waters of European commerce with the opening of its first physical store in Madrid, Spain, under the AliExpress Plaza banner. The 740-square-metre store will feature 1,000 products from over 60 brands.

Adhering to the retailer’s tried-and-tested “New Retail” strategy, Alibaba’s store is closely tied to online, in this case, the AliExpress online platform. The AliExpress store’s main purpose is to act as a showroom, allowing shoppers to browse and try out products in store, making the actual purchase via the AliExpress online portal.

Alibaba Store1

AliExpress has been making a concerted effort to establish a European presence since early 2018, when it launched its affiliate program for European sellers. This effort has paid off, with Spain, after the United States and Russia, being the largest market for AliExpress. More importantly for brands seeking growth outside their home markets, it represents a gateway to the rest of Europe.

This makes the opening of the Madrid store an obvious strategic decision to attract more shoppers to the Chinese marketplace and follows Alibaba’s strategic alliance with Spain’s El Corte Ingles.

Alibaba has clear intentions to not only expand internationally in key markets, such as Russia, but also through its growing ecosystem and global logistical capabilities to act as the gateway to China and the world. Its test-and-learn approach will no doubt see Alibaba expand such concepts to other European markets in its efforts to help brands reach China and beyond.

As retail becomes increasingly channel-less, ecosystems such as Alibaba’s online-to-offline approach, coupled with global infrastructure networks, will provide brands with a significant boost to growth, while providing operational efficiencies. This news should convince brands that Alibaba needs to be part of their strategic planning.

Source: Kantar

Editor's Notes

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