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Alibaba to Launch E-Commerce Hub in Belgium, Expand Globally


Reportedly, Alibaba Group Holding Limited BABA signed an agreement with the Belgium government to establish an e-commerce trade hub under the Electronic World Trade Platform (eWTP) initiative.

The eWTP was laid out in 2016 with an aim to lower e-commerce trade barriers and provide more equitable access to global markets for small and medium enterprises, as well as young people around the world.

Per the agreement, Alibaba's logistics arm, Cainiao will lease a 220,000 square meter logistics port at Belgium's Liege airport. In addition, it will invest an initial 75 million euros ($85 million) in the project, which is expected to begin operations in 2021.

The company expects these moves to help it expand operations in Europe, increase e-commerce activities and gain greater logistics efficiency.

Coming to share price performance, the company's shares have gained 9.2% on a year-to-date basis against the industry’s decline of 4.3%.

Belgium Holds a Promise

Per the latest report from Statista, revenues in the e-commerce market of Belgium are expected to reach $9,423 million by 2023 at a CAGR of 6.9% between 2018 and 2023.

This immense growth potential of the market can be attributed to rising demand for apparel in the fashion world.

We believe that Alibaba is well poised to gain momentum in the country's e-commerce market with the help of its logistics service platform.

Summing Up

As Alibaba focuses on international expansion, its efforts are directed worldwide including South East Asia, Europe, Middle East and the United States.

The Chinese e-commerce giant is consistently trying to expand its e-commerce presence worldwide and capitalize on the increasing online demand in international markets. In this regard, last year the company announced a plan to set up an e-commerce hub in Malaysia and Rwanda that will include logistics, cloud-computing and e-financial service for boosting trade and e-commerce in the region.

The new move is expected to help Alibaba do more on this front apart from strengthening its global logistics infrastructure.

Alibaba’s chief executive officer Daniel Zhang said, “We strongly believe that under the eWTP, we will open up the huge potential for European businesses to reap the benefits of global cross-border trade, especially into the China market.”

Zacks Rank & Stocks to Consider

Currently, Alibaba has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include AMETEK, Inc. AME, QuinStreet, Inc. QNST and Stamps.com Inc. STMP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for AMETEK, QuinStreet and Stamps.com is currently pegged at 11.18%, 25% and 15%, respectively.

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