Alibaba Group Holding Ltd (BABA) Taps The Economic Potential Of Xinjiang

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Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) has announced to push e-commerce into China’s western region, which has significant growth potential. Alibaba founder Jack Ma will tap the economic potential of China’s Xinjiang province and other neighboring areas to develop big data, e-commerce and cloud computing in the region.

Alibaba opens three online malls for Xinjiang

The Hangzhou-based company has signed an agreement with the regional government for the development of e-commerce and cloud computing. The online retailer has helped many small businesses sell their products worldwide through its Taobao and Tmall platforms. Jack Ma said sellers from Xinjiang will have the opportunity to sell their produce to the rest of China and the world.

The company has opened three online malls to sell specialties from the Xinjiang region to buyers around the world. One of the malls focuses on B2B bulk sales; the second one specializes in handicraft and agricultural products from the region. The third one has been designed to sell products from Xinjiang’s Kashgar prefecture. Products from Xinjiang generated $212 million in sales on Tmall, up 68.7% from last year.

The Alibaba way of maintaining growth

Jack Ma’s move could help counter extremism in the restive region. He is also riding on the Chinese president Xi Jinping’s pet project, the New Silk Road initiative, which will connect China to Europe. Alibaba is further penetrating into rural and semi-urban regions of China to maintain its robust growth. The company has been sending different teams to regions with rich farm products but limited market access.

Alibaba has grown to a nearly $300 billion enterprise by linking small businesses in remote areas to Chinese and International markets. Last week, Alibaba founder Jack Ma said he would invest more in India. He also held talks with the CEO of Indian e-commerce company Snapdeal, fueling speculations of a potential acquisition. Alibaba and Snapdeal have the same business model, and Japan’s SoftBank is a major shareholder in both these companies.

Alibaba shares fell 1.49% to $108.99 at 3:50 PM EST on Thursday.

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