Citi: Alibaba's AliExpress, Brazil's Magalu Team-Up is a Smart Move

Citi Research views the partnership between Alibaba’s AliExpress and Brazilian retail platform Magalu as a strategic effort to enhance AliExpress' services in Brazil amidst rising competition from Temu $PDD Holdings(PDD.US)$ and Shopee $Sea(SE.US)$ .

By launching AliExpress’ Choice service on Magalu's platform, AliExpress aims to expand user reach and grow GMV. This partnership also allows AliExpress to offer Magalu's 1P products, attracting more local merchants and boosting user loyalty.

Citi believes this collaboration can help AliExpress mitigate potential regulatory risks in Brazil by aligning with a local company.