Alibaba Group, which operates the online marketplace Alibaba.com, recently announced that it will now allow U.S.-based businesses to sell on the marketplace.
Alibaba currently has platforms in China, India, Brazil and Canada. It reported having more than 630 million annual active consumers on its China marketplace. Although approximately one-third of shoppers on Alibaba are U.S.-based, 95% of Alibaba sellers are located in China. Now, U.S. companies—which previously could only buy products on Alibaba.com—will be able to sell through Alibaba’s business-to-business (B2B) platform. This is a significant development, particularly given that in 2016 the B2B industry generated $23.9 trillion in revenue globally, compared to $3.8 trillion in the B2C market.
According to Reuters, Alibaba “hopes to attract 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.”
In contrast to Amazon.com’s U.S. platform, which charges sellers by the month or per item, Alibaba will charge U.S. B2B sellers an annual membership fee of approximately $2,000 to operate on the marketplace, plus marketing and advertising costs. Alibaba’s expansion to U.S. sellers will also feature an online payments system. Alibaba says its goal is to help small and mid-size businesses sell into China, not to compete for buyers with Amazon or eBay.com, according to reports by CNBC and CNN.
As this platform develops, U.S.-based product manufacturers, wholesalers and distributors will have an additional channel through which to expand the geographic reach of their products. And, as such, these companies must consider the import of this channel to their overall eCommerce and online sales control strategy.