Alibaba (BABA) May Find Overseas Expansion Challenging

Alibaba (NYSE: BABA) may find difficulty in maintaining profits as it looks to continue expanding internationally.

Digitimes noted Tuesday that Alibaba has recent strengthened operations via the utilization of mobile devices, which amounted to 32 percent of its online sales in Q2. The company has also expanded relationships with physical locations, offering online-to-offline plans and vice versa.

But, while Alibaba is looking to overseas markets, Digitimes said, Alibaba will face some operating issues including the high consumer's loyalty toward the market leader Amazon (Nasdaq: AMZN) for its high-quality and value-added services, different shopping behavior, and concerns over the storage of transaction data in a China-based firm.

While Alibaba will see its online transaction values continue to expand in China, its business model that counts on advertisements and services will be difficult to transfer from terminal ends to mobile devices. As more online transactions are shifting to mobile devices, it will be difficult for Alibaba to ramp up its profits ... due to different consumer demand and cultural differences, it is also difficult for Alibaba to duplicate its successful business model it did in China to overseas markets, Digitimes stated.

Shares of Alibaba are lower in early trading Tuesday.

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