Alibaba Group Holding Ltd (NYSE: BABA) has extended its "five-day delivery" service to the U.S., intensifying its competition with Temu and Shein in the lucrative market.
This service, provided through AliExpress, Alibaba's global e-commerce platform, guarantees U.S. customers their packages within five days, thanks to delivery efforts by Cainiao, Alibaba's logistics branch.
Initially launched in 2023, this rapid delivery initiative now includes other regions such as Germany, France, Portugal, Saudi Arabia, and Mexico, showcasing Alibaba's ambition to enhance its global e-commerce presence, SCMP reports.
This strategic move is part of Alibaba's broader effort to stay competitive amid the rise of new online retail platforms like Shein and PDD Holdings Inc's (NASDAQ: PDD) Temu, which have gained significant market share in the US and beyond with their aggressive pricing strategies.
AliExpress's Choice service, which promises quick delivery of high-quality products, reported a 60% year-on-year order increase in the December quarter.
Additionally, Cainiao's revenue saw a 24% increase in the same period, driven by its cross-border logistics services.
The company reported triple-digit growth in order volumes under the five-day delivery service between the September and December quarters.
Alibaba has committed $1.1 billion towards investments in South Korea over the next three years to establish a logistics center. AliExpress' monthly active users in South Korea have doubled since 2018, reaching 7 million.
Alibaba stock lost 9.4% last year as the planned IPOs of its cloud and logistics unit succumbed to market weakness.
Presently, the company remains invested in geographical expansion and its artificial intelligence endeavors to unlock shareholder value.
Investors can gain exposure to the stock via FlexShares Trust FlexShares ESG & Climate Emerging Markets Core Index Fund (NASDAQ: FEEM) and Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ).
Price Action: BABA shares are trading higher by 0.31% at $73.65 premarket on the last check Wednesday.