Chinese e-commerce giant Alibaba Group Holdings' share price hit its lowest price since it started trading on the New York Stock Exchange (NYSE) last September as it closed below $80 on Tuesday (U.S. time).
Alibaba's share price sank to a low of $77.77 earlier on Tuesday before closing at $79.54, a 1.3 percent fall from the day before and the fifth day in a row it has dropped since April 28. The closing price represented a year-to-date decline of 23.5 percent.
The Hangzhou-based online marketplaces operator is expected to announce its quarterly financial results ending March on Thursday.
Alibaba reported its financial results for the third quarter of fiscal 2015 in January. The company's revenue reached $4.22 billion, recording a year-on-year increase of 40 percent. However, the e-commerce giant has reported decreased net income, which was $964 million, down 28 percent from the same period in fiscal 2014.
Alibaba announced on Tuesday that it will turn its wholesale website 1688.com into a cross-border trade platform, which will take effect on May 18, according to an announcement published on 1688.com Tuesday night. Spain was the first country listed on the cross-border trade platform, followed by Portugal, Italy and South Korea.
The establishment of a global sourcing platform shows that Alibaba is feeling challenged by major rival JD.com Inc which set up a cross-border e-commerce platform in April, said Wang Xiaoxing, analyst from Beijing-based market research firm Analysys International.
"The recent decline in Alibaba's share prices signifies that investors' expectations are not very high," Wang said.
JD launched a global trade platform JD Worldwide in April, which enables Chinese shoppers to order goods from overseas markets like Australia and France, according to an announcement published on JD's website in April.
Wang noted that Alibaba's advantage in cross-border trade over JD is its wholesale business. The platform will simplify the trading process between foreign exporters and Chinese retailers, Wang said.
Compared to the traditional import process, it will cut the cost by 20 to 40 percent and the time by 15 to 60 days via the global sourcing business of 1688.com, Liu Fei, senior director of 1688.com, was quoted as saying in the announcement.
The new cross-border imports platform not only targets well-known foreign brands but also "some small but influential local brands that have not been able to enter the Chinese market," Liu noted in the announcement.
The new cross-border business plan is part of Alibaba's global strategy, Zhang Xiangli, analyst from Beijing-based market research firm iResearch, told the Global Times on Wednesday.
"As a major domestic wholesale platform, 1688.com will help foreign exporters reduce costs," Zhang said.
Zhang noted that Alibaba has already taken international brands into account, as the company's business-to-customer marketplace tmall.com has already brought many international brands to Chinese customers. "The cross-border trade platform is a step forward," Zhang said.
