NEW YORK (Reuters) – Chinese e-commerce giant Alibaba Group Holdings Ltd (BABA.N) will now allow small businesses in the United States to sell on Alibaba.com, the company said on Tuesday, an effort to tap into the business-to-business e-commerce market and fend off fierce competition from rivals like Amazon.com Inc (AMZN.O).
FILE PHOTO: A logo of Alibaba Group is seen at an exhibition during the World Intelligence Congress in Tianjin, China May 16, 2019. REUTERS/Jason Lee/File Photo
Previously, U.S.-based businesses were only able to buy items on Alibaba.com.
Roughly one-third of buyers on Alibaba.com are U.S.-based. More than 95% of sellers come from China. This plan will open up markets to U.S. merchants in countries including India, Brazil and Canada. U.S. merchants will also be able to sell to other U.S.-based businesses.
Alibaba’s pitch to U.S. small businesses comes as the company faces lean e-commerce revenue growth, which has been further threatened by the U.S.-China trade spat and increased competition from rivals such as recently listed Pinduoduo Inc (PDD.O).
Alibaba, which does not sell inventory of its own, hopes to win over local U.S. businesses as their marketplace platform of choice by offering small- and medium-sized businesses global selling power. Alibaba highlighted its interest in winning over manufacturers, wholesalers and distributors.
Last month, the company launched an English-language website for its Tmall Global marketplace aimed at merchants, in an attempt to double the number of international brands on the platform to 40,000 in the next three years.
Rival Amazon, in addition to selling its own inventory, allows third-party vendors to list products for sale on its website. Those vendors may store their products in Amazon’s warehouses or ship directly to customers.
The business-to-business e-commerce market (B2B) is valued at $23.9 trillion, according to the U.S. International Trade Commission. The business-to-consumer e-commerce market is valued at $3.8 trillion.
Alibaba said U.S. sellers will have to pay a membership fee of roughly $2,000 to get their online stores on Alibaba.com up and running, in addition to any marketing and advertising costs. Amazon charges third-party sellers by the month or per item.
“You get to compete and act like a multinational company in a way you’ve never had the tools or technology to be able to do so,” John Caplan, head of North America B2B at Alibaba Group, told Reuters.
The United States is the first market where the company is focusing on globalizing supply, Caplan said, but Alibaba has a “very clear approach to other markets.”
Reporting by Melissa Fares in New York; Editing by Leslie Adler