Chinese E-commerce Giant Alibaba to Enter Ethiopia

AliExpress, a major online retail service owned by Alibaba Group, is entering the Ethiopian market. According to Abiyot Bayu, (PhD) a Senior Advisor to the Minister of Innovation and Technology, who spoke with Shega, the agreement has been reached, and an official announcement will be made soon.

This news comes after a virtual meeting on August 7, 2024, between Ethiopian officials and an Alibaba team led by Chandee Zhuang, Senior Advisor at Alibaba Global Initiatives.

Alibaba and AliExpress are two platforms that have largely contributed to the success of thousands of eCommerce businesses. Alibaba is primarily designed for businesses looking to source products in large quantities. Meanwhile, Aliexpress is geared toward individuals looking to buy products in smaller quantities.

The entry aligns with Ethiopia’s recent reforms aimed at attracting foreign direct investment, which could significantly impact the nation’s economic landscape. In a bid to further encourage foreign investment, the Ethiopian Investment Board introduced a directive in April, allowing foreign participation in, wholesale, retail trade, imports, and exports—sectors that were previously reserved for domestic investors.

Additionally, the Ethiopian Ministry of Trade and Regional Integration has introduced a new licensing regime specifically tailored for electronic platforms. This new regime establishes a distinct e-commerce license category, eliminating the previous need for multiple licenses for electronic platforms. By streamlining the registration process for e-commerce businesses, the government aims to create a more favorable environment for digital commerce to thrive.

The Ethiopian Ministry of Trade & Regional Integration has given around 45 e-commerce licenses as of December 2023. Shega did not receive a response from Chandee Zhuang, Senior Advisor at Alibaba Global Initiative, before the publication of the article.

Alibaba’s entry into the Ethiopian market is long overdue. In 2019, Alibaba Group and the Ethiopian government signed a memorandum of understanding (MoU) to establish an Electronic World Trade Platform (eWTP), a potentially transformative initiative for the East African nation’s digital economy.

Proposed by Jack Ma, Alibaba’s founder, in 2016, the eWTP aims to create an open platform that facilitates collaboration among private enterprises, international organizations, governments, and social groups, with a focus on the development of SMEs and trade.

Although the entry of this e-commerce giant has been delayed for several years, the agreement resulted in the training of numerous Ethiopian entrepreneurs. According to Baheru Zeynu, founder and CEO of Africom Technologies, this training played a key role in the formation of the Digital Transformation Ethiopia Association. Baheru explained that the Association later reignited the initiative to bring the e-commerce giant to Ethiopia

Baheru also noted that the arrival of AliExpress in the Ethiopian market will create jobs, encourage startups, boost entrepreneurs’ confidence, and provide a platform to promote local products and services in the international market, thereby enhancing the country’s export potential.

It’s also worth noting that Alibaba was involved in a media controversy in Ethiopia two years ago. In January 2022, Ethiopian entrepreneur and business figure Ermias Amelga claimed he was developing an e-commerce platform in partnership with the Alibaba Group. Ermias told The Reporter that the platform would be launched within five to six months, implying it should have been operational by now or soon.

However, Alibaba Group refuted the claim, stating that it had no partnership agreements with Ermias.