In the future, the biggest threat that the AliExpress platform may encounter will be vertical segmentation websites such as LightInTheBox. Facing these new entrants who are striving to occupy more market share, AliExpress does have some disadvantages, such as product prices, logistics costs, payment security and delivery guarantees.
① Product prices
The AliExpress platform has a certain degree of disadvantage in terms of product prices. On the one hand, there is uncertainty in the price of products. The products on the AliExpress website are freely priced by different sellers on the platform, so its product pricing is relatively variable and difficult to predict; while the product prices of LightInTheBox and its similar websites are relatively fixed. On the other hand, AliExpress has high procurement costs. Due to the scale effect of product procurement, the products of LightInTheBox and its similar websites have a greater price advantage.
② Logistics costs
In terms of logistics costs, AliExpress logistics costs are high and more arbitrary. Sellers on AliExpress determine the logistics costs. They often set them very high in order to obtain higher profits. There is no unified pricing standard and the pricing is subjective and arbitrary. The logistics costs of LightInTheBox and similar websites are uniformly regulated by the headquarters, and the prices are transparent and relatively fixed. Moreover, since the logistics costs of AliExpress are determined by the sellers, their individual transaction volume makes their bargaining power weaker; while the logistics costs of LightInTheBox and similar websites are uniformly regulated by the headquarters, their delivery volume is large and their bargaining power is strong, so their average logistics costs are lower in comparison.
③ Payment security
There is uncertainty in the payment process of the AliExpress platform. Since each seller on AliExpress can choose the payment method according to their own preferences, the different methods obviously increase the uncertainty of the payment process, increase the risk, and easily cause security problems.
④ Delivery guarantee
AliExpress is at a disadvantage in terms of delivery cycle. Since AliExpress’ independent sellers are scattered across regions and have a dispersed structure, it is impossible to ship multiple products from one buyer at the same time; at the same time, the quality of each seller varies, which makes AliExpress unable to guarantee the delivery cycle, unable to carry out batch shipments, and even unable to support the “supplier shipment” model. However, LightInTheBox and similar websites can guarantee the delivery cycle, not only can multiple products be shipped together, but also support the “supplier shipment” model.