Following its B2B ecommerce-promoting deal with Office Depot earlier this year, Alibaba.com is reaching out to millions of U.S. small and mid-sized businesses with expanded services to help them buy and sell goods and services on its marketplace, Alibaba Group said today.
The move, along with expanding services from eBay Inc. and other marketplaces, shows that Alibaba and others are not ceding the B2B marketplace business to Amazon Business, the fast-growing B2B portal from Amazon.com Inc. that many companies see as an increasingly dominant player. (Launched in 2015, Amazon Business said last fall it surpassed $10 billion in annualized sales, and industry analysts have projected it will surpass $20 billion within two years.)
“Alibaba aims to empower entrepreneurs and help them succeed on their own terms,” John Caplan, Head of North America B2B at Alibaba Group, said in announcing the initiative today. “With 10 million active business buyers in over 190 countries and regions, we are reshaping B2B commerce by providing the tools and services needed for U.S. SMB companies to compete and succeed in today’s global marketplace.”
Among its newly available services is something those companies won’t find on Amazon Business: tools for building direct relationships with their marketplace customers; by comparison, Amazon controls the marketing relationships with customers on its ecommerce sites, whether customers buy from it or from a third-party seller.
Alibaba.com, which unlike Amazon doesn’t sell its own products, debuted as a B2B marketplace in 1999 as the first ecommerce portal launched by China-based Alibaba Group. Alibaba now does the lion’s share of its overall gross merchandise sales through its retail-focused marketplaces Tmall.com and Taobao.com, which combined did 5.7 trillion Chinese yuan (US$829.7 billion) in gross merchandise value of transactions for the year ended March 31, 2019.
Alibaba’s B2B channels
But B2B ecommerce has always been an important channel for Alibaba Group, which also operates the China-focused B2B site 1688.com. Although primarily a site for B2B buyers and sellers within China, 1688.com in recent years has also included sellers from the United States and other countries who want to sell into China. U.S. manufacturers including Michelman Inc., a producer of industrial inks and protective coatings, for example, sells into China through 1688.com.
Alibaba doesn’t break out figures on gross merchandise value for Alibaba.com, but it reported revenue from international wholesale commerce of 8.2 billion Chinese yuan (US$1.2 billion) for the year ended March 31, 2019, compared with 247.6 billion yuan ($36.9 billion) from its China-based retail ecommerce.
Alibaba.com—which initially operated as a marketplace where buyers throughout the world could access China-based suppliers—has also been reaching out in recent years to attract more international sellers as well as buyers. But this year it has been stepping up that effort.
‘Anchor sellers’ Robinson Fresh and Office Depot
Today’s announcement builds on an agreement Alibaba made earlier this year with Office Depot Inc., which is making its catalog of office supplies and related products on Alibaba.com and has agreed to make its distribution, fulfillment and delivery services in the U.S.—including 9 million square feet of space in distribution and fulfillment centers and a delivery network of more than 1,000 trucks—available to suppliers from throughout the world on Alibaba.com who want to sell to U.S. customers.
Robinson Fresh, a distributor of food products and services and a division of logistics services company C.H. Robinson, has also become an “anchor seller” that, like Office Depot, will make its product catalog available through Alibaba.com, Alibaba said today. The companies didn’t say whether Robinson Fresh or C.H. Robinson would also provide fulfillment or delivery services to Alibaba.com’s sellers; C.H. Robinson did not immediately return a request for comment.
In making its announcement today, Alibaba publicized several testimonials from small and mid-sized B2B businesses who are either buying or selling on Alibaba.com to grow their operations. They include Honey Baby Naturals, a supplier of hair care products designed for multi-racial families; Vassilaros & Sons, a coffee wholesaler; Gett Clean, a designer and manufacturer of cleaning products; and Cabello Coutoure, a designer and merchant of apparel and accessories in coordinated sets for families.
“We recognized the opportunity to expedite global growth through Alibaba.com early on,” Evan Gettinger, co-founder of New York-based Gett Clean, says in his testimonial. “With the new combination of platform tools available and the addition of major, name-brand sellers, we expect a faster path to our growth targets.”
Alibaba, in its efforts to engage more small and mid-sized businesses in B2B ecommerce, is competing in a field where marketplace giants eBay and Amazon.com Inc. also have extensive programs for B2B buyers and sellers. Marni Levine, vice president of merchandising at eBay—which, like Alibaba, does not take the Amazon approach of selling directly to buyers and competing with third-party sellers—says eBay helps new as well as established sellers set up B2B storefronts for reaching eBay’s 182 million buyers. “We partner—instead of compete—with our sellers” to help “generate traffic, sales, international exposure and mobile commerce, while providing B2B expertise,” she says.
Amazon Business also has been increasing features and services, including a new service through which sellers can work with sales reps for help with launching an Amazon storefront with a product catalog and shipping services. And while Amazon Business sellers often have to compete against Amazon itself to win online sales, many sellers of various types and sizes use services like Fulfillment by Amazon and other programs to help them win sales.
More services for U.S. companies
Under the program Alibaba announced today, it is offering the following new or expanded services:
For U.S.-based B2B sellers:
- A “streamlined” way to build and manage a single digital store on the global Alibaba.com platform;
- A new on-platform payment option for transactions processed within the United States, except in New York and Nevada, beginning July 25;
- “Enhanced” digital marketing tools to target demand in the B2B market, and newly available customer relationship management (CRM) and communication tools to “facilitate the direct ownership of customer relationships”;
For U.S.-based B2B buyers:
- A “more robust inquiry” feature to help buyers begin discussions with sellers and negotiate deals;
- An expanded selection of products including customized and ready-to-ship items;
- An improved site search for finding the right supplier and products for customized as well as finished goods.
In addition, Alibaba today said that participants on Alibaba.com will have access to “member-exclusive” offers that it will make available through an expanding group of business technology and service providers, including: shipping services from 71lbs and ShipStation, ecommerce software from BigCommerce, recruitment services from Indeed, and on-demand manufacturing services from Xometry.
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