• AliExpress orders surged over 60% YoY in the three months ended Dec. 31, driven by Choice

• Choice is a premium service designed to ease cross-border shopping for merchants and shoppers
  

Alibaba Group is investing in its international network, particularly a service run by cross-border e-commerce marketplace AliExpress called Choice.

Choice has been expanding rapidly, gaining traction among consumers and merchants alike.

“The introduction of Choice represents a watershed moment for AliExpress,” said Gary Topp, European Commercial Director at AliExpress.

To understand why, look no further. We’ve done the legwork and compiled the ultimate guide to Choice.

What is Choice?

Choice is a premium e-commerce service underpinned by a slick supply chain. You can find it as a tab on the AliExpress homepage or at the front of its app.

To understand how Choice is different, let’s take a look at how traditional e-commerce models work.

In a classic approach, third-party (3P) merchants sell products on a marketplace. They’re 100% responsible for logistics and customer service. In another, called a consignment or 1P model, the platform sells the products for the merchant, acting as the retailer while the merchant is its wholesale supplier.

Choice is a hybrid of the two, combining the infrastructure of the AliExpress marketplace and Alibaba Group-wide capabilities, with upgraded services, to create a “fully-entrusted” business model.

Why is this an upgrade? Choice sources products straight from merchants and factories, shortening the supply chain so it can offer value for money to shoppers while taking care of customer acquisition, pricing, delivery and after-sales service.

It exercises greater control over product selection and quality control, attributes of the 1P model while offering the wide selection of stock-keeping units and scalability of the 3P model.

How did Choice start?

Business-to-consumer e-commerce platform AliExpress officially launched Choice on March 1, 2023. However, Choice didn’t just pop out of nowhere fully formed.

Choice sits on the AliExpress marketplace. It also has roots in Alibaba Group’s “Fulfilled by Cainiao”, a cross-border service on AliExpress and Tmall Global.

Management has said that given Choice is less than a year old, it’s still at an early stage in achieving its full potential, so as it scales, unit economics will improve.

As we approach the first anniversary of Choice’s launch, we’re delving deeper into what it offers both consumers and merchants.

Why Choice?

For shoppers:

By taking responsibility for consumers’ end-to-end shopping experience, AliExpress has increased customer satisfaction levels. 

As more merchants join the platform, Choice has curated a wider assortment of value-for-money products across a broader range of categories. 

Purchases arrive faster than previously in some markets. Consumers in selected countries enjoy free shipping, free returns and quality delivery guarantees when placing orders on Choice.

Products in the AliExpress Choice section are eligible for free shipping in most of its markets for purchases worth over $10, or on purchases of three items or over. As of December 2023, consumers in over 20 countries, including Spain and France, are entitled to free returns on all products, and 23 countries, including Germany and Switzerland, are offered a delivery guarantee.

“AliExpress launched Choice as a response to our customers’ ongoing demands for a higher level of user experience and product quality, while maintaining the value for money that AliExpress is known for,” said AliExpress’ Topp.

For merchants:

The Choice model dramatically reduces the complexity of doing business for merchants, paving the way for more diverse merchandise on the site. This helps create a virtuous cycle by improving customer satisfaction and drawing in yet more shoppers.

In the Choice model, sellers focus on what they’re best at, product development and manufacturing, while AliExpress takes the wheel for other services. It has developed a one-stop solution that seamlessly integrates sales operations, payment, logistics and warehousing.

Choice works with merchants to ensure quality control of better product selection, ultimately resulting in higher sales. Think virtuous circle again.

This approach gives merchants greater certainty for planning, helps them expand efficiently internationally and drives growth for both their businesses and AliExpress.

Is Choice part of Alibaba?

Choice is part of AliExpress, which sits within Alibaba Group’s business group Alibaba International Digital Commerce Group (AIDC).

Alibaba reorganized in 2023 into a holding company to make its business groups, including AIDC and logistics company Cainiao, more nimble and the opportunity to pursue external funding.

Is delivery fast?

Yes, and getting faster. Choice works closely with e-commerce logistics firm Cainiao, a sister business within the holding company Alibaba Group.

By leveraging Cainiao’s logistics technologies and infrastructure, AliExpress can offer a shorter delivery time in some countries. AliExpress and Cainiao announced a global five-day delivery guarantee program in June and began piloting the service in Spain in September.

As of Dec. 30, Cainiao offers its premium global five-day delivery service for consumers in the UK, Spain, Netherlands, Belgium and others.

“Cross-border direct shipping and overseas last-mile delivery solve the logistics needs of merchants across product categories, and improve our purchase conversion rate on the AliExpress Choice channel,” said Jorge Sun, Head of AliExpress e-commerce, AGM Outdoor Mobile.

To support Choice’s expansion, Cainiao provides parcel bundling and direct shipping to its consumers. Data analytics and algorithms cut delivery time and improve efficiency.

Choice uses warehouses for exports and parcel consolidation to support direct shipping, that is from supplier to consumer circumventing the need for a physical store. It also enables merchants to achieve full-scale global logistics management with worldwide shipping.

Ahead of the Lunar New Year, the Cainiao-AliExpress joint Choice warehouse for exports reported a six-fold growth of stock volume year-over-year, partly fueled by the broadened product selection enabled by the service.

Can SMEs use Choice?

AIDC’s goal is to help SMEs worldwide to engage in digital trade.

One of the best ways to predict future e-commerce trends and the effectiveness of business models is to study activity during 11.11, the world’s largest shopping festival that runs from late October to mid-November

A large number of small to medium-sized enterprises (SMEs) registered booming sales during 11.11, and the volume of merchandise placed by merchants in Choice warehouses grew by severalfold compared to the previous festival. 

During 11.11 last year, orders from the AliExpress consumer electronics seller Zeuslap surged in the South Korean market driven by Choice. On the first day of the sales promotion, Zeuslap’s sales volume exceeded its total sales registered during the entire 11.11 promotion the previous year, generating a seven-digit revenue figure in renminbi.

Is Choice working?

International commerce has been a bright spot in Alibaba Group’s recent financial performance, surprising analysts with faster-than-expected growth over several fiscal quarters.

AliExpress’ order volume jumped over 60% year-over-year for the quarter ending Dec. 31, contributing to a 44% year-over-year leap in Alibaba International Digital Commerce Group’s revenue, exceeding market expectations for the sixth consecutive quarter.

Choice has significantly improved AliExpress’ user retention rate and purchase frequency.

Ahead of Black Friday 2023, inventory in Cainiao’s AliExpress joint warehouses soared nearly 900%, as revealed by data from Cainiao.

In Spain, AliExpress was the second-most visited e-commerce platform in December 2023, according to Club Ecommerce and EGI Group. In the United States, Similarweb data showed AliExpress’ monthly average visits soared to 24.2 million in 2023, a 290% year-on-year spike, marking it as one of the nation’s fastest-growing e-commerce sites.

In South Korea, AliExpress’s monthly active users surpassed 7 million in November, nearly double the number from a year ago, mobile market research firm WiseApp reported. Its profile is growing in the country, helped by South Korean actor Ma Dong-seok, also known as Don Lee, Choice’s first brand ambassador.

“By delivering standout features like complimentary shipping, swift delivery and easy returns, we are cultivating stronger customer loyalty while solidifying our market presence. Looking ahead, we are dedicated to further refining the Choice offering and perpetually elevating the shopper experience,” said AliExpress’ Topp.

What’s the outlook?

Bright. Alibaba Group has said it will continue to invest in deepening Choice’s penetration across target markets.

The push is accelerating the service’s underlying momentum. In January 2024, nearly half of the AliExpress orders were placed via Choice, underscoring the service’s rapidly increasing customer adoption.

Since its launch, Choice has rapidly rolled out across markets, including in South Korea and Spain.

During the fiscal year to March 31, Choice was available in 215 countries and regions. This rollout is set to continue in the coming months as Alibaba continues to invest in the business.

In addition to the global English-language version, it is available in 17 other languages.

“Moving forward, our commitment lies in continuously enhancing our user experience, expanding our product selection, and providing the best value for money,” said Topp, AliExpress.