Chinese business-to-business e-commerce giant Alibaba Group (NYSE:BABA) said Tuesday that it will make its platform, Alibaba.com, available to U.S.-based sellers, a dramatic step with competitive ramifications for all players in the domestic e-commerce supply chain.
The new channel will be marketed to U.S.-based manufacturers, wholesalers and distributors, and will involve a “new network of industry partners” such as “anchor sellers,” Alibaba said. Among them is Robinson Fresh, the produce unit of broker and third-party logistics provider C.H. Robinson Worldwide Inc. (NASDAQ:CHRW), which launched a store on the site on Tuesday. Another is office supply firm Office Depot, Inc.
The launch will be accompanied by a nationwide U.S. tour to meet with business owners and explain the site’s nuances and benefits, Alibaba said. The first event was held today in Brooklyn, New York, with events in Los Angeles and Chicago scheduled for the coming week. Online payment systems were launched today as well, though they are not currently available to sellers in New York and Nevada, Alibaba said.
The platform’s focus, Alibaba said, will be on the 30 million U.S. small to mid-sized business (SMB) owners. Alibaba will teach them how to source and sell on the site. The SMB market is especially coveted as these businesses typically lack the in-house resources and expertise to sell globally, and can command higher margins than their much-larger counterparts. FedEx Corp., (NYSE:FDX) UPS Inc. (NYSE:UPS) and DHL Express, a unit of German giant Deutsche Post DHL, are aggressively courting the SMB segment. Amazon.com, Inc.’s (NASDAQ:AMZN) bread-and-butter customers increasingly are third-party merchants, most of them smaller companies, who use Amazon’s fulfillment and delivery services.
Until now, Alibaba’s services were available in the U.S. only to buyers of goods from China. However, it was thought that it was a matter of when, not if, Alibaba would open its platform to U.S. sellers.
Alibaba estimates the global B2B e-commerce market to be nearly $24 billion. According to a recent study by Forrester Research, B2B e-commerce sales in the United States hit $1.134 trillion in 2018, equal to about 12 percent of the $9 trillion in total B2B U.S. spending last year.
Founded in 1999, Alibaba reaches 190 countries with a network of 150,000 sellers and 10 million buyers. According to Brittain Ladd, a former Amazon executive and an e-commerce consultant, Alibaba has the track record in retail and logistics expertise to cut a wide swath of disruption through the B2B market in the U.S. and its labyrinth of retailers and delivery companies. “Alibaba has a significant opportunity to become the anti-Amazon and anti-Walmart,” Ladd said in a Linkedin post. “In addition, Alibaba has the potential to leverage its platform and logistics prowess to help companies avoid using established players like FedEx and UPS.”
Ladd has said that Alibaba should buy a U.S. retailer to fully establish its U.S. presence, but that it would fall to President Trump to approve such a deal if one does occur.
In 2013, Alibaba, along with eight other companies, founded Cainiao Logistics. It is the logistics unit of Alibaba.