Alibaba is accelerating its global expansion. 

In June 2026, Alibaba's cross-border e-commerce platform AliExpress delivered a standout performance during its overseas "618" shopping festival debut: in core markets such as Spain, France, and Poland, orders fulfilled from local warehouses accounted for over 50% of total sales for the first time, surpassing traditional cross-border direct shipments. 

This milestone reflects AliExpress's recent intensified efforts in Europe. The platform previously forged a strategic partnership with Austrian Post to establish local warehousing and logistics networks while expanding self-service pickup lockers and other infrastructure. Simultaneously, it continued scaling its local warehouse networks across Spain, France, and Poland. 

Jing Shi, President of AliExpress, stated that the platform aims to "evolve from a mere sales channel into infrastructure supporting brand growth." 

The former model positions the platform as a simple transaction intermediary driven by traffic and pricing. The latter requires deep involvement in brands' entire globalization journey, from warehousing and logistics to localized marketing, user operations, and even pricing strategies to build brand equity. 

These investments signal AliExpress's strategic shift from scale to branding and from low prices to value creation, marking its transition from the "asset-light, low-price" cross-border 2.0 model to an "asset-heavy, branded" new phase. 

Just a month earlier in May 2026, Alibaba released its Q4 2026 fiscal year earnings. 

The report showed Alibaba International Digital Commerce Group (AIDC) generated RMB 35.429 billion in revenue (+6% YoY), with adjusted EBITA losses narrowing to RMB 138 million—a significant reduction from RMB 3.574 billion in losses during the same period last year. 

AliExpress emerged as the key growth driver. The earnings highlighted sustained improvement in unit economics for AliExpress Choice, while the Brand+ program achieved over 30% penetration among quarterly active buyers. 

As domestic e-commerce competition nears saturation, Alibaba urgently needs a new growth engine to support its long-term narrative, with AliExpress becoming an indispensable chapter. 

I. Low Prices No Longer Define AliExpress 

Once upon a time, Alibaba's domestic e-commerce served as the conglomerate's core growth driver. 

In FY2026, Alibaba's revenue surpassed RMB 1 trillion, with Taobao & Tmall Group contributing RMB 554.217 billion (+9% YoY). However, growth had slowed to single digits for an extended period. 

Taobao & Tmall play multiple roles within Alibaba, bearing heavy investments in instant retail and user experience while providing sustained cash flow for cash-burning segments like Alibaba International and Alibaba Cloud. 

Seeking new growth avenues, overseas e-commerce has emerged as a primary focus. 

Currently, Alibaba's international business remains unprofitable, relying heavily on domestic operations for support. AliExpress's brand transformation aims to pioneer a sustainable development path for global e-commerce. 

Drastic shifts in external policy environments are also accelerating AliExpress's branding pivot. 

Jing Shi, President of AliExpress, predicted at a closed-door meeting that cross-border e-commerce is entering Phase III. As tariff costs rise and compliance tightens, the competitive edge of "more choices and lower prices" is rapidly eroding, necessitating a shift toward "better quality and faster delivery." 

Achieving "better and faster" requires long-term infrastructure investment. For the past decade, Chinese cross-border e-commerce has heavily relied on duty-free policies for low-value parcels—the so-called "De Minimis Rule." 

Starting in 2025, this favorable framework began unraveling. Continuous tariff hikes and adjustments to "de minimis" exemptions for sub-$800 parcels loomed, while the EU planned new tax schemes imposing administrative fees per cross-border transaction. 

Rising tariff costs directly compressed profit margins that once sustained low-price models. In contrast, high-value-added products and branded operations emerged as potential growth avenues capable of supporting premium pricing. 

External pressures from competitors are also forcing AliExpress to accelerate its transformation. 

In earlier years, Temu, SHEIN, TikTok Shop, and AliExpress were viewed as China's cross-border e-commerce "Four Horsemen." By 2025, competitive dynamics had shifted dramatically. 

International Post Corporation data showed Temu captured 24% of global market share in 2025—tying with Amazon—while SHEIN held 9% and AliExpress slipped to 8% (down from 9% in 2024). 

Moreover, AliExpress still had room to improve in converting traffic into actual orders. In 2025, it ranked third globally with 646 million monthly visits, trailing only Amazon and Temu. 

Compared to rivals with distinct business models, AliExpress's positioning previously appeared ambiguous. 

For example, Temu relies on supply chain efficiency and extreme cost-performance ratios, using its "full-service" model where the platform controls pricing, operations, and logistics while capturing user mindshare through front-end price reductions. In 2025, Temu expanded with a "semi-managed" model to strengthen supply chain control, attracting mature sellers with overseas warehousing capabilities. That year, Temu secured 24% of global cross-border e-commerce market share, tying with Amazon for the top spot. 

SHEIN built its moat through a "small-batch, rapid-response" flexible supply chain, scaling its proprietary brands before expanding via platform strategy. In 2025, SHEIN's exports exceeded RMB 100 billion, with net profit estimated at $2 billion—doubling YoY. 

TikTok Shop leverages content as its foundation, stimulating consumer demand through short videos and livestreaming to create "product-to-consumer" pathways. While its operational models (full-service, semi-managed) became increasingly homogenized with other platforms, its content ecosystem remained irreplaceable—forming a unique competitive barrier. 

In contrast, AliExpress underwent more dramatic repositioning. During the low-price wars of the past two years, it adopted a Temu-like approach through its Choice full-service model, where merchants entrusted goods to the platform for pricing, sales, logistics, and after-sales. Relying on centralized control, AliExpress lowered prices to attract users. 

However, low-price strategies often require platform subsidies. Pre-funding for warehousing, fulfillment, and user experience improvements could drive business expansion while escalating cost pressures. 

Unlike Temu's clear low-price positioning, SHEIN's established fast-fashion identity, or TikTok Shop's content-driven model, AliExpress had yet to forge a distinctive brand image in consumers' minds. 

This resulted in reactive strategies as competitors seized market share. When the market transitioned from traffic growth to inventory (stock) competition, AliExpress's weaknesses became more pronounced. 

AliExpress's brand transformation aims to clarify its positioning, upgrading from low-price bulk sales to a comprehensive service provider for brand globalization, thereby securing a proactive position in differentiated competition. To achieve this, AliExpress launched a series of initiatives. 

In September 2025, AliExpress initiated the "Super Brand Globalization Program," pledging to help brands gain incremental growth at half of Amazon's operational costs. By early 2026, over 50 top brands had signed up, including Xiaomi International, which designated AliExpress as its "primary globalization platform." 

In March 2026, AliExpress rolled out the "Overseas Managed Fulfillment Program," using platform buyout and inventory guarantees to onboard 1,000 merchants in its first phase, significantly reducing trial costs during the transition. By the inaugural "Overseas 618" festival in 2026, European local warehouse orders exceeded 50% for the first time, with over 50% of large-item transactions (furniture, appliances) originating from overseas managed inventory. 

The transformation's impact gradually materialized. In FY2026, Alibaba's AIDC revenue reached RMB 144.17 billion (+9% YoY), matching domestic e-commerce growth. By Q4 2026, AIDC's adjusted EBITA losses narrowed to RMB 138 million—a 96% reduction from RMB 3.574 billion in the same period last year. 

II. Unbranded Goods Shift Left, Brands Shift Right 

For AliExpress, branding delivers compounding advantages. 

Data showed that during overseas "Double 11" and "Black Friday" promotions in 2025, over 300 brands achieved daily sales on AliExpress double those on Amazon. By the first day of the 2026 overseas 618 festival, Brand+'s GMV penetration neared 40%. 

Meanwhile, AliExpress's branded GMV surged over 40% YoY in FY2025, with the number of brands exceeding RMB 10 million in annual sales increasing by 64%. Quality brands like Xiaomi, Pop Mart, Unitree, Baseus, Dreame, Honor, Li-Ning, and Xtep joined the platform. 

Through brand transformation, AliExpress is escaping the low-margin trap of relying solely on traffic-driven transactions. Branded merchants offer higher average order values, controlled return rates, stronger user loyalty, and willingness to pay for advertising and marketing. This customer base shift is transforming AliExpress from a subsidy-dependent traffic platform into a brand ecosystem with pricing power and premium capabilities. 

This evolution gives AliExpress confidence to compete with Amazon for market share. Nielsen's 《2026 Outbound Brand Platform Migration White Paper》 revealed that while Amazon's branded GMV declined 4% overall, AliExpress grew 4%—leading the "Four Horsemen"—as significant mid-to-high-end brand share migrated from Amazon to AliExpress. 

Over the past year, 89% of European consumers switched primary shopping platforms, with 14% moving from Amazon to AliExpress. 

As traffic dividends fade and price wars become unsustainable, boosting average order value and user retention has become imperative for e-commerce platforms. However, in AliExpress's brand-centric ecosystem, consumer choice and cost structures are also evolving. 

Emphasizing branding means pricing incorporates brand premiums, implying preferential platform support for branded merchants. During AliExpress's early stages, unbranded goods dominated, with pricing nearing factory costs plus minimal logistics expenses under cost-performance strategies. 

Reports indicate that around 2018, AliExpress's product prices averaged over 50% lower than other e-commerce platforms. Smartphones sold for as low as €80, with frequent discounts and free shipping. 

As branded merchants flooded in and platform resources shifted toward branded inventory, AliExpress's brand count surged 70% YoY in H1 2025. The platform launched a dedicated Brand+ section on its homepage, allocated premium traffic to brands, and offered VIP logistics services. 

Simultaneously, unbranded goods faced shrinking operational space. The platform explicitly restricted unbranded participation in core promotions like Black Friday and Double 11, phased out low-efficiency merchants, tightened entry rules, and paused new individual seller registrations. For users seeking extreme cost-performance, this meant fewer "steals" on AliExpress, potentially alienating some of its traditional user base. 

SHEIN positions itself as "affordable fast fashion," building competitive barriers through design and rapid product refreshes. However, its essence remains unbranded or lightly branded merchandise, with a global average order value around $50–60. 

Temu leverages Pinduoduo's domestic supply chain advantages, using a "factory-direct + streamlined distribution" model to slash prices. By eliminating intermediaries and offering platform subsidies, it achieves extreme low pricing, with comparable products priced at ~60% of SHEIN's. 

Notably, since 2025, AliExpress has adjusted commission rates multiple times. Reports indicate that in February 2025, the platform split commissions into "base commission" and "transaction service fees," with a unified 2.5% service fee and category-based commission rates ranging from 2.5%–5.5%. 

In August, commission rates for automotive parts, beauty/health, consumer electronics, and other categories were adjusted to 3.5%–9%. 

As the platform evolves from a pure sales channel to brand infrastructure, these fee structure changes subtly signal the need for additional revenue to support infrastructure investments. Consequently, brand merchants and consumers may feel cost pressures from the platform. 

Additionally, AliExpress's current "POP + Full-Service" dual-track mechanism creates friction with its brand transformation. The full-service model emphasizes platform-controlled inventory and unified pricing for efficiency, while branding requires differentiated pricing, personalized operations, and brand autonomy. 

Balancing these priorities—appeasing brand merchants to elevate the platform's ecosystem while retaining SMEs and price-sensitive users—remains AliExpress's most challenging equilibrium to strike during its brand transformation. 

III. Alibaba's Global Expansion: Navigating via AliExpress 

At the 2022 AliExpress Summit, Zhang Kaifu, then Alibaba Group Vice President, set an ambitious goal: to make AliExpress the world's largest cross-border e-commerce platform. Four years later, Zhang has departed, and the platform still has ground to cover. However, AliExpress's strategic weight within Alibaba continues to grow. 

Under Wu Yongming's leadership, Alibaba defined two core strategies: "AI + Cloud" and "Consumer Platform Globalization," with AliExpress serving as the latter's key global anchor. 

In FY2025, Alibaba's International Digital Commerce Group revenue reached RMB 132.3 billion (+29% YoY), with international retail revenue surging 33% to RMB 108.465 billion. 

For comparison, Taobao & Tmall Group grew just 3% in FY2025, making Alibaba International the company's fastest-growing segment at nearly 30% YoY. By Q4 2026, AIDC nearly achieved break-even, with AliExpress as its primary growth engine. As domestic e-commerce growth stalls, AliExpress now serves as both a revenue driver and a valuation narrative builder for Alibaba. 

Yan Zhi, Head of AliExpress Brand Globalization, stated that three years of capability development have equipped AIDC to support branding initiatives. 

Should AliExpress's brand transformation continue improving profitability or even achieve break-even, AIDC could transform from a cost center to a profit generator for Alibaba. 

Currently, Alibaba's three-pronged global strategy forms a synergistic ecosystem. For example, Taobao Global focuses on long-tail commodity globalization. Lazada connects Southeast Asian markets via Tmall, leveraging localization to meet regional consumer needs. AliExpress emphasizes brand upgrades, using tiered services and AI tools to penetrate the high-average-order-value market and compete directly with Amazon. 

Each front has distinct priorities, but AliExpress plays a particularly critical role: it is Alibaba's most globalized and widely covered overseas e-commerce platform, with the most mature branding infrastructure and direct competitive standing against Amazon. If AliExpress's branding path succeeds, it will accumulate valuable experience for Alibaba's broader global expansion.