June. 3, 2011– Paypal announced on its bolg that its partnership with Aliexpress will end on August.1, 2011. Aliexpress, an Alibaba site dominating the B2B online international trade market, climbed to the number 1 spot of the most visited online international trade website last year.

Aliexpress and Paypal

Despite the fact that Aliexpress is merely one year old, it is attractive to western purchasers. Several key data to show here is that the site has 0.5 million active sellers online selling 5 million pieces of products. Most of them are Chinese sellers selling to European and American buyers. This is also what I called a “CS2AB” type of Ecommerce type which means Chinese Sellers to American Buyers. Alibaba is the first choice of Chinese eCommerce and Chinese B2B platform, and sellers are from China. So apparently, the key to success is that Alibaba is a Chinese friendly site so that people have built confidence trading on Alibaba. This explains why Aliexpress, owned by Alibaba, is growing at an extremely fast rate, and people like it! Also, it explains why xiaonei.com(renren.com) beats facebook,  QQ beats Skype& MSN, Taobao beats Ebay, Dingdang beats Amazon. Local wisdom is the key to success in China, it seems like.

It all leads to our last topic, is it a wise move for Paypal to end this partnership with AliExpress? Paypay, first of all, is a company under Ebay China. Aliexpress is taking over eBay china in the international trade competition. The only easy way to possibly slow down AliExpress is to stop Aliexpress using Paypal which is American’s best online payment method. But to me, the answer is clear, will VISA stop you from buying your favourite Laptop at the cheapest price by quiting the service to that laptop store? No. You have many alternatives to VISA such as Discover, MasterCard, American Express… Paypal cannot slow down the growth of Aliexpress. Maybe Alipay the so-called Chinese paypal, will soon take over and dominate. Paypal’s move is not a smart one.