AliExpress dominates the Middle East, with sellers’ orders up 40%

A huge new market is opening up to Chinese sellers on AliExpress.

"The UAE and Saudi Arabia are the fastest growing countries, increasing by about 5-10 times. "

"Recently, many orders have come from Saudi Arabia."

Xiao Lijuan, the founder of women's dress brand SERENEHILL, is a cross-border e-commerce seller on AliExpress. Over the past year, she has witnessed the rapid development of AliExpress in the Middle East market.

AliExpress ads dominate the screens of major landmarks in the Middle East

At this moment, if you are at Times Square, the busiest boulevard in Riyadh, Saudi Arabia, you will see huge offline advertisements of AliExpress saying "Say Hi" to the bustling Saudi consumers from all directions and angles; at the same time, Saudi Arabia's largest highway sign also displays huge advertisements of AliExpress, and the constant flow of vehicles passing by further enhances the offline popularity of AliExpress.

AliExpress advertisement in Times Square, the landmark of Saudi Arabia - The Boulevard

Today is the traditional festival of Ramadan in the Islamic world. This is not only a month for Muslims to fast and purify their souls, but also an important period for family gatherings and religious ceremonies. As a result, the demand for shopping has arisen. In the Middle East, where the Internet penetration rate is over 90%, Ramadan has also become a popular period for e-commerce promotions. AliExpress's offline display in Saudi Arabia's most landmark building has also made many Saudi consumers take out their mobile phones and download it immediately, opening up a new shopping experience in Ramadan.

Of course, AliExpress's investment in the Middle East is far more than that. According to Saudi media reports, famous Saudi football stars Salem Al-Dawsari and Feras Al Brikan have officially signed contracts to become AliExpress Middle East spokespersons. The former once disrupted Messi's dream of advancing to the 2022 World Cup with a cold shot. In Saudi Arabia, which regards football as a national honor and responsibility, these two stars are very popular.

This is also the second time that AliExpress has used the "local face" strategy after the Korean market. By signing two football superstars, it will help it attract a large number of new users to register in a short period of time and quickly increase its influence. During Ramadan, AliExpress also took advantage of the situation to launch activities related to football stars and give consumers free jerseys to attract more users. At present, the two spokespersons' social accounts have a total of 2.4 million fans, and they are very popular in the entire Middle East.

In addition, the accelerated entry of Chinese e-commerce has also improved the logistics level of the Middle East market. The Middle East is vast and sparsely populated, with a large per capita delivery area; and in the field of road infrastructure, there was "no real highway" in the past. Different from domestic couriers who generally use electric tricycles for delivery, in the Middle East, because the population is sparse and the delivery distance is long; and the logistics price is high, consumers are accustomed to buying multiple items at a time, and the unit package volume is large. Couriers mostly drive Wuling Hongguang-sized vans for delivery. In the desert areas where there are few people, they even need to use camels to deliver the last kilometer.

To this end, AliExpress and Cainiao International have joined hands to improve the timeliness of fulfillment. In August 2022, AliExpress and Cainiao International Express opened the first Middle East overseas warehouse and distribution center in Israel; in June 2023, AliExpress added a new overseas warehouse in Dubai, UAE, covering the entire Middle East.

The long-term logistics construction began to explode in 2023. In August 2023, the order volume in the Middle East region of AliExrpess increased by 40% month-on-month.

A series of frequent efforts in the Middle East have also brought positive feedback from the market.

This March marks the first anniversary of AliExpress's global launch of its Choice service based on a managed model. The Choice business has become the main driving force behind AliExpress's 60% year-on-year growth in orders . The essence of AliExpress's Choice model is to upgrade the original pure platform business model to a hybrid business model driven by supply chain efficiency, platform marketplace plus full managed services, and to provide the platform with the most appropriate supply and balance between richness and price. In January this year, Choice orders accounted for half of the platform's overall order volume.

Alibaba's latest financial report shows that Alibaba's international e-commerce revenue grew by 44%, exceeding market expectations for six consecutive quarters. In the latest financial report conference call, AliExpress stated that the next period of time will be a period of large-scale investment in overseas markets.

Along with the market investment is continuous logistics construction. In March 2024, Cainiao and AliExpress announced that "Global Five-Day Delivery" will be expanded to more than a dozen countries and regions including Saudi Arabia.

According to a report released by Dubai South E-commerce Zone, the total scale of e-commerce in the Middle East and North Africa is expected to reach US$57 billion by 2026, showing a strong growth trend. On the one hand, Alibaba has extended its global business tentacles to many countries in the Middle East through its Turkish e-commerce platform Trendyol; on the other hand, it has entered the GCC Gulf countries with AliExpress, continued to increase its investment in the Middle East market, and continued to build cross-border logistics through Cainiao.

“She Economy” Promotes Consumer Awakening in the Middle East Market

The Middle East, especially the Gulf countries, has a sufficient young population, high consumption capacity, and a considerable digital economy. According to the data of the International Monetary Fund in 2023, the per capita GDP of the six Gulf countries is between US$42,200 and US$124,800, all above the baseline of developed countries (GDP per capita of US$20,000). In addition, the population under 30 years old in the six Gulf countries accounts for 60% to 80%, and the Internet penetration rate is above 90%.

The rise of female consumers has contributed to this growth.

As Middle Eastern countries represented by Saudi Arabia accelerate the process of secularization and opening up to the outside world, Middle Eastern women are increasingly participating in public life. The consumption growth potential brought about by the "her economy" makes the growth prospects of the Middle East, a hotbed of e-commerce, more imaginative.

As a female clothing brand seller on AliExpress, Xiao Lijuan has a clear feeling. "Local consumer concepts are also changing. For example, many of the dresses chosen by female consumers there are very sexy and bold. They are no longer all black, but more colorful and bright, which is completely different from our previous perception."

Many SERENEHILL products are sexy and gorgeous. In the process of constantly improving the design for the market, Xiao Lijuan also sensed the change in Middle Eastern women's preference for dresses. "We mainly serve the European and Middle Eastern markets. The traditional impression is that the Middle Eastern market is more conservative than Europe, but now the dress styles of some Middle Eastern countries have reached the forefront of fashion. After some avant-garde and bold products were put on the market, Middle Eastern consumers accepted them earlier than European consumers. "

AliExpress brand SERENEHILL dresses are very popular in the Middle East

Compared with the UAE, which has the international financial center Dubai, Saudi Arabia, the largest economy in the Middle East, is also eye-catching. Saudi Arabia, which is accelerating its digital economic transformation, regards the development of e-commerce as an important way to achieve economic diversification in its "Vision 2030".

Encouraging the development of e-commerce has also become the reason why the scale of Saudi Arabia's e-commerce has continued to rise in recent years. In 2019, Saudi Arabia passed the E-commerce Law to regulate and support the development of e-commerce; in 2022, the Saudi Ministry of Commerce issued more than 30,000 e-commerce operating licenses. Data shows that the scale of Saudi Arabia's e-commerce is expected to reach US$13.61 billion by 2024 and US$27.37 billion in 2029, with a compound annual growth rate of 15.01%.

The next incremental market for major e-commerce giants

Market changes in the Middle East are also attracting cross-border e-commerce platforms represented by the "Four Little Dragons Going Global".

It's not just AliExpress that is targeting the Middle East. As early as 2015, China's cross-border unicorn SHEIN had already deployed in the Middle East; the up-and-coming Temu also went online in Israel in August 2023, using it as a starting point to leverage Middle Eastern e-commerce; in May 2023, one of the first trial sites for TikTok Shop to launch its fully hosted model was also chosen in Saudi Arabia.

SHEIN, which was the first domestic e-commerce company to bet on the Middle East, has occupied a place in the market by leveraging its supply chain advantages and positioning itself as a "fashion e-commerce company."

In 2017, Amazon acquired the Middle Eastern local e-commerce platform Souq for US$580 million, entering the Middle East market with great strength. It currently covers many Middle Eastern countries including Saudi Arabia, the United Arab Emirates, Egypt, Bahrain, Kuwait, Oman and Qatar. It has more than 10 operation centers, 65 self-operated and third-party delivery stations, and a network of distribution service providers for small and medium-sized enterprises in the Middle East and North Africa.

However, neither Amazon nor SHEIN can fully cover the Middle East market. For the established competitive landscape of e-commerce in the Middle East, today's AliExpress is more like a fierce intruder, which has made frequent efforts and heavy investments, and used aggressive market strategies to achieve rapid breakthroughs in this emerging blue ocean.

The blue ocean of e-commerce flowing with milk and honey is attracting more and more e-commerce players and cross-border sellers to rush in and compete in the Middle East.

The emergence of e-commerce platforms has also led to the gradual improvement and prosperity of e-commerce ecosystems such as marketing, payment, and logistics. AliExpress is relying on its ecological advantage of opening up the entire cross-border chain to help Chinese cross-border sellers conquer this last new blue ocean of e-commerce in the world.