Alibaba Partners With Saudi Arabia And UAE Firms As China Gets Closer To Gulf

In a strategic move, Alibaba Group Holding Ltd. (NYSE:BABA) has initiated partnerships with local companies in Saudi Arabia and the United Arab Emirates (UAE) as China strengthens its relations with the Gulf region.

What Happened: Alibaba’s President, Michael Evans, revealed the company’s plans at the World Government Summit in Dubai, Bloomberg reported on Wednesday. The move is seen as an effort to regain its position in the tech industry after facing penalties and making strategic errors. Co-founder Jack Ma had previously called for a correction in the company’s direction.

Evans emphasized the importance of local partners in maintaining a strong connection with the local market. This development comes when the Gulf nations are strengthening their ties with China, seeking investments to diversify their economies beyond oil.

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However, this shift is being met with resistance from the U.S., which is wary of entities with close links to Beijing. Abu Dhabi’s G42 recently announced a reduction in its presence in China and a commitment to investing in key Western markets to address U.S. concerns.

Why It Matters: The move to partner with local firms in the Gulf region is a strategic one for Alibaba, which has been facing challenges in its core e-commerce business. Despite this, the company’s international arm, Alibaba International, recorded a significant 44% revenue growth in its latest quarterly results. This growth was largely driven by AliExpress, the company’s B2C platform.

However, Alibaba has been losing ground to rival platforms in China, with merchants shifting their allegiance to platforms like JD.com and Douyin.

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