Tech

Go back to your cave: Alibabas European expansion triggers anger in Liège

LIÈGE, Belgium — Welcome to the staging ground for Alibabas European surge.

Over the past year, the Chinese e-commerce giant has been quietly transforming this mid-sized Belgian city into an international transport hub and European logistics center — complete with an airport that operates 24/7 importing products from China and dispatching them around the bloc.

The investment is a key part of Alibabas strategy to compete against U.S. rival Amazon and others in one of the worlds richest markets. Its already brought clear economic benefits to Belgiums fifth-largest city — a once-thriving industrial center where many hope that Alibaba can help revive the economy.

Yet as the firms footprint expands, with plenty of help from the Belgian government, its also running into home-grown opposition. A local grassroots movement that calls itself “Watching Alibaba” argues that the costs of hosting the Chinese guest — which it says include more frequent flyovers, snarled traffic, growing air pollution and jammed postal centers — far outweigh the benefits.

“I dont want to live in a city where everybody is unable to sleep properly because of thousands of planes flying over us every night,” said François Schreuer, a founding member of Watching Alibaba during a protest in January that gathered some 50 people in central Liège.

“Our investment at Liège airport is an opportunity for local businesse” — Derek Sun, manager in charge of the project in Alibabas logistics arm Cainiao

“At the very least, we demand a stop to the development of the airport,” added Schreuer, whos also a member of the local green party, Vega.

The protesters — who say residents werent sufficiently consulted on the scale of plans before Liège was designated as the firms European hub — are unlikely to scare off the company with placards urging Alibaba to “go back to your cave.”

The investment is the result of years of fierce jockeying between countries during which Belgium managed to out-lobby other contenders for Alibabas favor, namely Germany and the Netherlands.

But the pushback is giving Alibaba a taste of the “techlash” that has been plaguing Silicon Valley companies for years in Europe.

Jack Ma, left, Alibabas founder and chairman, is greeted by former Belgian Prime Minister Charles Michel in Brussels in 2018 | Stephanie Lecocq/EPA

In 2018, local protests brought Googles plans for a vast Berlin campus to a halt, while Apple stores in France have been the site of “die in” protests by taxation activists furious over the firms optimization schemes.

Once mainly an issue for U.S. firms, that ire is now being directed at Chinese companies as well.

Alibaba insists it is working together with the locals, and has no plans to slow down or scale back its ambitions.

“Our investment at Liège airport is an opportunity for local businesses, and we look forward to partnering with them to market and sell Belgian and European products to China and other global markets,” said Derek Sun, the manager in charge of the project in Alibabas logistics arm Cainiao.

Alibaba vs. Amazon

For Alibaba, which had about a fifth of Amazons global revenue in 2018, the Liège investment will allow it to compete against the U.S. rival in the midst of a U.S.-China trade dispute and a wobbly economy back home.

So far in Europe, Alibaba has been able to challenge Amazon on price but not on delivery speed.

Liège is set to change that. By providing a portal into Western Europes most prosperous markets in France, Germany, the U.K. and the Netherlands, Alibaba hopes to be able to deliver products around the bloc in a matter for hours. To satisfy demand for ever-cheaper goods, Alibaba also pledges to ship anything over from China to Europe in just 72 hours.

The starting signal for this expansion was given in 2018, when Belgium became the first European country to sign up for Alibabas trade initiative, the Electronic World Trade Platform (“eWTP”).

“We dont want Alibaba, Amazon or any other e-commerce here. They are incompatible with the fight against global warming” — François Schreuer, founding member of Watching Alibaba

The deal allows small and medium-sized Belgian businesses to trade on Alibabas global platform. In return, Alibabas logistics arm, Cainiao, pledged to invest €75 million-€100 million to build a warehouse on a 220,000 square-meter area in Liège airport by 2021 that is expected to create 900 direct jobs.

In addition, plans are underway to transform the area around Liège airport into a bigger logistics and warehouse hub. But first, the airport needs to demolish government-subsidized roads and water, drainage and electricity infrastructure to make way for Alibabas warehouses.

But the Alibaba deal was many years in the making. In an effort to attract Chinese investment, the Belgian government pulled out all the stops, sending no fewer than 600 delegates to China last November for a visit to Alibabas Shanghai offices.

Princess Astrid, the Belgian kings sister, and then-Foreign Minister Didier Reynders were among the attendees. Even King Philippe, who visited China in 2015, was last year photographed shaking hands with Alibabas former CEO Jack Ma at the World Economic Forum in Davos, Switzerland.

King Philippe of Belgium, left, with Jack Ma in London in 2016 | Laurie Diffembacq/AFP via Getty Images

Both sides are touting the Liège deal as an example of the benefits of China-EU ties.

When the expansion is completed in 2021, its expected to create potentially thousands of jobs thanks to increased economic activity, in addition to the 900 jobs at the airport.

Thats a major boon for a region that has been struggling to recover from the collapse of heavy industry starting in the 1960s, and where the unemployment rate — which hit 23.4 percent in 2019, according to the Forem job center — is higher than in other parts of French-speaking Belgium.

Michel Kempeneers of Awex, the Walloon export and foreign investment agency, estimates that the deal with Alibaba will bring in around €300 million in the long term.

Bigger than Frankfurt?

But the Watching Alibaba contingent still isnt satisfied. On one hand, protesters are concerned about the quality of jobs that Alibaba is bringing in, wary of reports about tough working conditions at Amazon fulfillment centers.

On the other, they warn in particular about the environmental impact of Alibabas arrival in Liège — echoing calls across Europe and among EU lawmakers to give much greater scrutiny to the environmental impact of home-delivery services.

“We dont want Alibaba, Amazon or any other e-commerce here. They are incompatible with the fight against global warming,” added Schreuer said.

There is no doubt that Alibaba is about to have a powerful transformative effect on Liège.

politico