Analysis of the Impact of AliExpress Smart Socket Category Growth on Alibaba's Cross-Border E-Commerce Business Valuation

Let me now conduct a comprehensive analysis of the valuation impact for you.

AliExpress’ smart socket category has achieved over 50% year-over-year growth, while attracting top brands originally on the Amazon platform such as BSEED and TNCE to join. This trend reflects that the competitive appeal of Alibaba’s cross-border e-commerce business is significantly strengthening, and a pattern of accelerated migration of brand merchants from Amazon to AliExpress is taking shape[0][1].

Alibaba’s stock price has performed strongly over the past year, with a gain of 7.21% since the beginning of 2025. Recently, driven by its AI strategy and improvements in cross-border e-commerce business, the stock price has continued to rise[0].

• Profitability
  : Net profit margin 12.19%, ROE 12.16%
• Liquidity
  : Current ratio 1.46, quick ratio 1.46, sound financial condition
• Cash Flow
  : Abundant operating cash flow, FCF approximately $77.5 billion
• Debt Risk
  : Low-risk rating, well-controlled financial leverage[0]

AliExpress’ smart socket category has grown by over 50%, a growth rate far exceeding the platform’s average, reflecting the following trends:

1. Strong Consumer Demand
   : The penetration rate of smart home products in overseas markets continues to increase
2. Prominent Supply Chain Advantages
   : The cost and quality advantages of Chinese manufacturing are recognized by overseas consumers
3. Improved Platform Operation Capabilities
   : AliExpress’ optimizations in logistics, payment, after-sales service and other links have taken effect

In 2025, AliExpress upgraded its “Super Brand Global Expansion Program”, clearly stating that it “helps merchants achieve higher transaction volumes in key markets with operating costs half of Amazon’s”, which has strong appeal to brand merchants[1].

According to the latest data, Alibaba’s international business shows positive development momentum:

• Revenue Growth
  : International retail business revenue continues to rise, projected to reach $92 billion in 2025
• Improved Profitability
  : The international business turned profitable in Q3 2025, with operating margin turning positive from negative to 1.2%
• Growth Expectations
  : International business revenue is projected to reach $110 billion in 2026, with operating margin increasing to 3.5%[1][2]

The 50%+ growth of the smart socket category is a microcosm of AliExpress’ overall growth. With more high-quality brands joining, the international business revenue is expected to maintain a compound annual growth rate of over 20%, which directly enhances the company’s overall valuation foundation.

The migration of brand merchants brings higher average order value and gross profit margin:

• The average selling price of products from brand merchants is 30-50% higher than that of white-label products
• Brand merchants have higher repurchase rates and user loyalty
• Platform commission and advertising revenue grow accordingly

AliExpress’ position in the “Four Cross-Border E-Commerce Giants” landscape is further consolidated:

AliExpress’ differentiated positioning - focusing on brand merchants’ global expansion - gives it a unique advantage in the competitive landscape[1].

Currently, Alibaba is trading at a P/E ratio of 22.78x, which is lower than its historical valuation center. As the profitability of the international business improves, the market may re-evaluate:

• Conservative Scenario
  : The international business maintains current profitability levels, with limited valuation premium
• Base Scenario
  : The international business maintains 20% growth, with P/E ratio rising to 25-28x
• Optimistic Scenario
  : Brand migration accelerates, the international business becomes the second growth curve, and the P/E ratio may exceed 30x

1. Cost Advantage
   : AliExpress offers operating costs half of Amazon’s, which has strong appeal to merchants
2. Ecosystem Synergy
   : Connected with Tmall and Lazada to realize a “light global expansion” model
3. Logistics Upgrade
   : Cainiao Network’s international logistics capabilities continue to be strengthened
4. Policy Support
   : China’s brand global expansion strategy has received policy support

1. Tariff Policy Uncertainty
   : Fluctuations in U.S. tariff policies in 2025 affect cross-border e-commerce profits
2. Cancellation of Duty-Free Policy for Small Parcels
   : Markets such as the EU and the U.S. have successively canceled duty-free policies, increasing compliance costs
3. Intensified Competition
   : Platforms such as Temu and SHEIN continue to expand, leading to price competition pressure
4. Geopolitical Risks
   : Uncertainties in Sino-U.S. trade relations may affect business development

Target Price Range: $140.00 - $225.00[0]

The specific impact of AliExpress’ smart socket category growth of over 50% and brand migration trend on valuation is reflected in the following aspects:

Taking all factors into consideration, the improvement of Alibaba’s cross-border e-commerce business may bring a

• Short-term stock price fluctuation risk
• Macroeconomic uncertainty
• Policy and regulatory risks
• Changes in competitive landscape

[0] Jinling AI - Alibaba Real-Time Quotes and Financial Data (2026-01-14)

[1] Sina Finance - “2025 in Review: Has Cross-Border E-Commerce Changed Completely?!” (2026-01-04) https://finance.sina.com.cn/tech/roll/2026-01-04/doc-inhfctqm0240328.shtml

[2] TradingKey - Alibaba Rating and Valuation Analysis (2026-01-05) https://www.tradingkey.com/zh-hant/markets/stocks/nasdaq-baba/stock-analysis