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US Internet Industry: What Alphabet, Facebook, Amazon Are Up To

PART:
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Part 9
US Internet Industry: What Alphabet, Facebook, Amazon Are Up To PART 9 OF 15

Alibaba Opens Its Doors to Mexican Merchants

Helping Mexican businesses in China

Alibaba (BABA) has inked a deal with Mexico’s government to enable Mexican businesses to sell their items in China (MCHI) through Alibaba’s e-commerce platform.

Under the agreement, Alibaba will train Mexican businesses on e-commerce best practices and how to succeed in China. The training will focus on areas such as digital payments, logistics, and analysis.

Alibaba provides digital payment services through its Ant Financial subsidiary, which is acquiring US (SPY) payment remittance MoneyGram (MGI) for $1.2 billion.

Alibaba Opens Its Doors to Mexican Merchants

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Expanding market for Mexican products

For Mexican businesses, the agreement with Alibaba promises to diversify and expand their market. The tough stance of President Donald Trump’s administration on issues such as immigration and trade policies may have unsettled people in Mexico enough for them to see the need to open up new markets for its products.

For Alibaba, the deal with Mexico marks another step in its international expansion. In fiscal 1Q18 (June quarter), Alibaba generated 4.2 billion yuan in revenue from e-commerce operations. Alibaba is expanding internationally to expand and diversify its market. It currently relies on China for the majority of its revenues. The chart above illustrates the growth of Alibaba’s international sales.

Cloud computing opportunity

Boosting its e-commerce business and entering into the agreement with Mexico could, over time, open up new markets for Alibaba’s cloud computing and digital payments businesses. Alibaba is battling with Amazon (AMZN), Microsoft (MSFT), and Alphabet’s (GOOGL) Google for control of the cloud computing market.

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