A DELIVERY OF GOODS FROM ALIEXPRESS MIGHT BECOME FREE

The Chinese logistics company Cainiao, a part of the Alibaba Group holding, made a decision to invest in the development of AliExpress’s retail infrastructure in Russia. We are talking about the subsidies that planned to be provided for the Russian sellers using the AliExpress and Tmall platforms by the Chinese operator in cooperation with AliExpress Russia.   

Cainiao had previously announced its intention to invest about one billion rubles in the development of IT projects related to the activities of the Alibaba Group in Russia from June 2020 to May 2021. As a result, it was decided to spend half of the proposed investment (about 500 million rubles) on financial incentives for the sellers who were the clients of the respective websites.

AliExpress Russia is a company owned by the Mail.ru Group, MegaFon and RDIF (Russian Direct Investment Fund) along with Alibaba Group.

The purpose of this action is to motivate the sellers to establish an updated tariff program, according to which the delivery of products to the buyer in many cases will become free.

The company will pay 60 rubles for each order to the sellers who choose new tariffs and use the fulfillment operator services (sorting, delivery, warehouses, etc.).

As a result, the delivery of goods which are more expensive than 500 rubles to the points of delivery and to the self-pickup points will become free for the buyers. For those, who prefer to pick up goods in Moscow, using the services of a courier, orders from 2500 rubles will be free. There are different options in various regions of the country. According to the representatives of Cainiao, the new tariffs will make more than half of the orders for the Russian buyers completely free. In other cases, the delivery price may be insignificant, not exceeding 100 rubles.  

We should recall that the volume of sales, achieved by the online – shops owned by AliExpress Russia, has exceeded 35.9 billion rubles in 2019. Now Cainiao hopes to further strengthen its market weight, financially motivating sellers to use its services.

New sellers will receive benefits from AliExpress in the form of ten free deliveries. As for the next deliveries, the sellers will have to pay for them, receiving a subsidy.

Paid delivery in this case will be impossible for sellers. The company expects that such measures will bring turnover to the level of 150-200% of the current.

The experts note that the unprecedented measures announced by the company have important psychological effect. In particular, this will allow many sellers to take a more relaxed approach to the pricing process while maintaining competitiveness. So far, AliExpress ranks seventh in the ranking among Russian e-commerce operators in terms of sales. However, an investment of 500 million rubles, along with an increase in the number of warehouses and the emergence of new services for the provision of ordering and the returning goods services, will help the company to significantly boost its rating.