China's e-commerce giant Alibaba formally located its South China headquarters in Guangzhou Development District, making it the group's second regional headquarters since the opening of its Hangzhou headquarters.

According to the reports in local media, Wei Zhe, president of Alibaba, says that the economic environment for small and medium enterprises in the Pearl River Delta has been changing, so the establishment of Alibaba's Guangzhou headquarters aims to help these enterprises find new business channels. Interestingly, while Alibaba has now landed in the province, smaller rival MadeinChina.com just announced last month that it was closing its office in the province because of poor business prospects.

Wei says that although the number of its registered e-commerce customers in Guangdong Province almost equals that in Zhejiang Province, the number of customers who are actually using the e-commerce platform is merely one-third that of Zhejiang. That is because the companies in the Pearl River Delta rely too much on their geographical advantage, but the single-channel model may bring troubles to these companies when the external environment changes. At present, the Guangdong government and the companies have begun to realize the important role that e-commerce plays in industrial upgrading. With the help of e-commerce, they can disperse the risks while developing new markets and new customers.

With a total investment of USD50 million, the South China headquarters is a wholly-owned subsidiary of Alibaba. According to the schedule of the company, the new regional headquarters will first serve the more than 6,000 enterprises within the Guangzhou Development District, then it will expand its services to the entire Guangzhou City, the Guangdong Province, the whole country and even global enterprises who take Southeast Asia as their centers.

By the end of 2007, Alibaba claims to have over 27 million registered users on its Chinese and English websites, of which 18% are entities from Guangdong.