Alibaba needs to look for growth beyond China and Southeast Asia in a ‘bipolar world for technology’
- Chinese tech giant Alibaba needs to look beyond China and Southeast Asia in order to sustain current levels of growth, according to Gil Luria, director of research at D.A. Davidson
- Most of Alibaba’s revenue currently comes from its China retail marketplaces that include the Taobao and Tmall shopping platforms as well as its online-to-offline grocery chain.
- The company’s most notable presence outside China is through Lazada, a Southeast Asian e-commerce platform in which Alibaba owns a majority stake.
SINGAPORE — Chinese tech giant Alibaba needs to look beyond China and Southeast Asia in order to sustain current levels of growth, an analyst said Thursday.
With more than 750 million active users in China, Alibaba is at a point where it is beginning to hit saturation, according to Gil Luria, director of research at D.A. Davidson. The company is already talking about lower-tier Chinese cities as potential growth avenues but Luria said the markets there are not as fertile as the top-tier cities and there is already stiff competition in those places.
“Their growth is going to have to come from outside of China,” he said on CNBC’s “Squawk Box Asia” on Thursday. “For them to sustain the levels of growth they have right now, with China approaching saturation, Southeast Asia is only going to carry them for so long before they have to get into some of those other markets in order to sustain this growth.”
Some of those potential growth markets include Latin America and Africa where e-commerce penetration still has room for growth and China has some influence. Alibaba has a presence