Alibaba.com is known mostly as a global e-commerce portal where companies can buy online from millions of China-based suppliers, but the business-to-business site is taking several steps to broaden participation among sellers and buyers in the United States and other markets.
“Many people think we’re only a site for China-based suppliers, but that’s a misrepresentation,” says Michael Lee, director of global marketing and business development, adding, “We’re seeing increased demand from buyers for services. They’re not happy just finding a supplier.”
Among its newest services is a financing program Alibaba.com announced Tuesday in association with the Lending Club, which lets buyers apply for financing of transactions valued up to $300,000.
Alibaba.com is the international B2B trading site of Alibaba Group, which also operates major retail e-marketplaces Taobao.com and Tmall.com in China and attracted global attention in September when its IPO on the New York Stock Exchange raised a record $25 billion. Alibaba says Alibaba.com “serves millions of buyers and suppliers around the world,” though it would not provide specific numbers. The company says the suppliers selling through Alibaba.com are mostly manufacturers and distributors based in China and other countries, including the United States, India, Pakistan and Thailand.
Alibaba wants to expand the number of suppliers on Alibaba.com from outside of China, Lee says. One way it is doing that is by making it easier for businesses to complete transactions. Through its new arrangement with San Francisco-based Lending Club, buyers on Alibaba.com can apply online for an Alibaba.com e-Credit Line to finance purchases ranging in value from $5,000 to $300,000. Lending Club makes the financing available through WebBank, a Salt Lake City-based bank insured by the Federal Deposit Insurance Corp. Monthly fixed interest rates range from 0.5% to 2.4% over term lengths of up to six months.
When buyers apply on Alibaba.com for financing, they typically learn within several minutes the level of financing for which they can get “pre-approved,” Lee says. The next step is to submit such documentation as business bank statements and tax returns to verify income.
“Our mission is to make it easy to do business anywhere,” Lee says. “We want to make financing as efficient as possible for the millions of U.S. buyers that do business through Alibaba.com.” In turn, he adds, Alibaba expects an increase in finance-based buyers will also attract more suppliers.
The top 10 categories of products from U.S. suppliers, he adds, are:
Beauty & Personal Care
Health & Medical
Food & Beverage
Automobile & Motorcycles
Computer Hardware & Software
Minerals & Metallurgy
Lee notes that many of the buyers on Alibaba.com are small retailers and start-up businesses that may not have the cash or banking relationships needed to finance large transactions. “A traditional U.S. bank may not be able to meet their needs,” he says.
Other services Alibaba.com is offering to facilitate more transactions among buyers and sellers is Trade Assurance, which provides buyers with refunds of up to 100% if an order is not completed as promised by a supplier. Alibaba charges no fees to buyers or sellers for the assurance program.
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