Consumers who fancy a shopping trip down their home town’s Main Street but don’t want to leave the comfort of their couch now have an alternative. 11Main.com, a new U.S.-based e-marketplace owned by Chinese e-commerce powerhouse Alibaba Group Holdings Ltd., launched today with between 1,000 and 2,000 virtual boutiques where shoppers can purchase such niche and hard-to-find items as sunglasses made from wood or a Swiss Army-like iPhone case that holds miniature pens and tools.
“We want it to be like shopping Main Street from the web,” says Mike Effle, 11 Main president and general manager. The site offers products from categories including: Fashion & Style, Home & Outdoor, Jewelry & Watches, Baby & Kids, Collecting & Art, and Crafts, Hobbies & Toys.
In an interview with Internet Retailer at the 2014 Internet Retailer Conference & Exhibition in Chicago yesterday, Effle said he’s excited to finally be able to discuss the site, which he and about 200 employees have been quietly working on since mid-2013 at Alibaba’s Silicon Valley office in San Mateo, CA, and at an office in Chico, CA.
While owned by Alibaba, the site is the brainchild of three e-commerce vendors: Auctiva and Vendio Services Inc., both of which Alibaba acquired in 2010, and SingleFeed, which Vendio bought in 2011. All three vendors offer merchants tools to help sell online either via standalone e-commerce sites or on such web marketplaces as those operated by Amazon.com Inc. and eBay Inc. The three vendors are still operating, says Effle, who comes from Vendio, working with 250,000 sellers who together sell about $6.5 billion each year, he says. About half of the stores launching today on 11 Main are current clients of the three vendors, Effle says. 11Main.com also employs a merchandising team to recruit and sign up shops, he says.
11Main will charge shops 5 cents per product listing per month plus a 3.5% transaction fee which is capped at $50. However, clients of Auctiva, Vendio and SingleFeed aren’t charged the listing fee. Merchants on 11 Main can sign on with one of the vendors to get their listing fees waived at any time, Effle says.
Since 11Main finds, recruits and approves stores to sell on its site, it doesn’t anticipate being plagued with dishonest sellers. 11Main also approves all descriptions, images and titles contained in each store before a seller goes live, according to a list of its seller guidelines. That extensive guide includes a section called How to Set Up a Shop, which offers instructions on creating logos, taglines and ensuring details such as return policies and shipping fees are clearly outlined. It also suggests the type of lighting and angles to use when taking photos of products.
While the site may seem similar to Etsy.com, Effle says 11Main is different in that each shop is a professional business, not, for example, hobbyists looking for some extra cash. Many operate boutiques in small towns or neighborhoods of chic cities and want to reach more shoppers, Effle says. “These are operating specialty shops, boutiques and shop owners,” Effle says. “The idea is for shopper to be able to visit Main Street shop owners and support small businesses.”
The site heavily focuses on the shop experience. For example, visitors can search by shop name as well as product category. 11Main.com also helps boutique owners create videos and text about how they got into the business and other selling points. For example, the wooden sunglass store, Woodzee, plants a tree for each pair of frames purchased and the toolkit-cum-iPhone case, from boutique IN1 Case, is approved for air travel by the Transportation Security Administration. The owner of that shop came up with the dual-purpose case after getting tired of needing a pen and not having one handy, Effle says.
Consumers shopping the site can store a payment card, purchase from all stores and check out at once, Effle says. Shipping couriers and fees are up to each shop owner. That’s in part because many of the shops that sell products online elsewhere already have established shipping policies, Effle says.
While owned by Alibaba, Effle says the company mainly operates independently. Two Alibaba executives sit on the 11Main board, including Alibaba chief operating officerDaniel Zhang and Michael Zeisser, chairman of U.S. Investments, Alibaba Group. “They are hugely supportive of us as entrepreneurs,” Effle says.
11Main hopes the allure of bringing Main Street to consumer living rooms will differentiate it from U.S. e-marketplace powerhouses Amazon and eBay. But it could be an uphill battle. Both pose formidable competition. In February 2014, Amazon ranked sixth among all U.S. web sites with 98.5 million unique monthly visitors while eBay stood at No. 15 with 61.5 million, according to web measurement firm comScore Inc. Amazon was the seller of record for more than $67 billion worth of goods in 2013, while the value of goods sold on eBay’s marketplaces totaled around $76 billion in 2013.
What’s more eBay is making a similar curated play with its recently launched Collections, which help customers discover products. It has tapped “expert” curators, including the daughter of aquatic explorer Jacques-Yves Cousteau and rapper-designer Pharrel Williams, to create web collections of their favorite items on eBay. Customers and retailers can also create their own collections and follow one another on eBay.
11Main, meanwhile has a powerful tool in its arsenal with the e-commerce expertise and might of Alibaba, which operates Taobao and Tmall, the dominant web marketplaces in China. Despite being an ocean away, Alibaba knows a great deal about e-commerce. The two sites, which Alibaba calls the Tao companies, host more than 7 million sellers and attract 100 million shoppers daily. Taobao accounts for more than 90% of China’s so-called consumer-to-consumer online shopping market and Tmall.com, in the third quarter of 2013, accounted for 51.1% of business-to-consumer online retail sales, according to Julia Q. Zhu, a former Alibaba employee and founder of Observer Solutions, a research and advisory firm that helps Western businesses develop and execute their e-commerce strategies in China.
What’s more, the Chinese giant has money to invest in projects like 11 Main. Alibaba’s 2013 revenue increased 62.2% to $7.95 billion in 2013 from $4.90 billion a year earlier, and its profits grew 282% to $3.56 billion from $932 million in 2012, according to data released by Yahoo Inc. as part of its earnings release. Yahoo reports Alibaba financial results because it owns 24% of the Chinese e-commerce company.
Meanwhile, while U.S. consumers may be intrigued by the idea of shopping Main Street online, 11 Main is also being careful to prevent its small sellers from being bombarded from the get-go. For now, shoppers must receive an invitation to virtually stroll 11 Main.com.
That Alibaba would launch a site in the U.S. is only natural, says Forrester analyst Kelland Willis. But it won’t be without its challenges. “Acquiring mass traffic will likely be their biggest issue to date, but with a long tail of products it may be easier than we expect,” she says. “They are, after all, running their own SEO business in the form of Tmall in China and may be able to use that experience in the United States. Additional challenges include recruiting interesting sellers and merchandising the products in a way that is aesthetically pleasing to the US online shopper.”
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