In line with China's deepening relationship with the Gulf region, Alibaba has begun to build strategic partnerships with local companies in Saudi Arabia and the UAE to better adapt to different market needs and development opportunities.
When faced with how to explore different markets, Evans emphasized the importance of choosing partners in the local market, and that strengthening relationships in Alibaba's regional markets will help better integrate into local development. Alibaba's partners in Saudi Arabia and the UAE are Saudi Telecom Company (STC) and Dubai World Trade Center (DWTC), respectively. Through cooperation with local companies, Alibaba's gains infrastructure and network support, and enriches the way to observe the local market and cultural understanding.
The initiative coincides with efforts by Gulf countries to strengthen ties with China, as they seek to diversify their economies away from oil dependence by attracting investment. Last year, the UAE and Saudi Arabia were invited to join the BRICS, an important step towards this goal and highlighting China's role in these expansion efforts.
Alibaba's strategy of partnering with local entities in the Gulf is important in expanding its core e-commerce business, with Alibaba International's revenues growing 44% year-on-year in the fourth quarter of 2023. In addition to its e-commerce business, Aliyun is rapidly increasing its market share in the MENA region. In November last year, Aliyun and its partners at GITEX Global launched a localized service program, including the development of local learning paths and free cloud migration services for more than 100 startups, with the aim of helping customers achieve digital transformation. Aliyun is also committed to developing digital talent in the MENA region to support cloud adoption and digital transformation in these regions.
Alibaba's strategic placement and capital expansion has opened up new opportunities for Chinese companies to grow in the Middle East. The Middle East is one of the fastest-growing venture capital markets, with Saudi Arabia being one of the largest in the region. one-third of all venture capital investments in 2022 will go to Saudi Arabia. In December last year, the Saudi Public Investment Fund (PIF) injected more capital into its joint venture with Alibaba Group, eWTP Arabia Capital.
For Chinese companies, the Middle East has unique e-commerce development opportunities and challenges. The Middle East market has a high demand for imported consumer goods and high internet penetration, providing a favorable environment for cross-border e-commerce development. However, logistics issues and the specificity of payment methods in the Middle East remain challenges to be overcome.
In the future, the development of Chinese companies in the Middle East will be further strengthened. Alibaba's partnerships and investments will drive digital transformation in the Middle East and provide support for Chinese companies to develop a broader market there. At the same time, Chinese companies need to actively address local challenges and provide solutions that meet local characteristics and needs in order to achieve sustainable development in the Middle East.