MELBOURNE - Chinese online retailing giant, Alibaba, has announced on Tuesday that it will open its first local office in the Australian city of Melbourne later this year, after flagging its intentions to expand outside of China.

Alibaba's global president Michael Evans said Australia was a "huge part" of the company's long-term globalization strategy to raise its 423 million customers to two billion by 2036, as it plans to expand its presence internationally.

"Australia and New Zealand are a big part of our globalization strategy. In markets which are very important to us we want a good group of people working for us," Evans told The Australian Financial Review on Tuesday.

"We want to develop government and regulatory relationships; we want to grow here strongly. It's a key part of what we are doing internationally."

The e-commerce business, reportedly worth 200 billion US dollars, currently has eight staff in Australia.

However, with plans to open up its first office in the city of Melbourne by the end of 2016, Alibaba will target Australian consumers as it plans to boost its business over the next three to five years.

Alibaba products are used by a number of Australian retailers, including Blackmores, Woolworths and Chemist Warehouse. Australia was ranked the fifth top-selling country into China during the company's global shopping festival, Singles Day, last year.

Evans said Australian businesses would be well placed to take advantage of the spending boom in south-east Asia.

"We connect with about half a million consumers here. They are actually not all Chinese speaking consumers," he said on Tuesday.

"We are going to engage in e-commerce going both ways, export to foreign markets, import to Australia."

Evans said most of Australia's dealings with Alibaba centered around milk powder.

There are 1300 Australian businesses selling on Alibaba's online global platforms, and the company is confident that number will rise once it begins its expansion into Australia.