On Tuesday Alibaba Group Holdings Ltd. (NYSE: BABA) indicated that the company will now let United States small businesses to sell their products on its platform Alibaba.com. This is an effort that the Chinese e-commerce company is making to leverage the business-to-business online market as well as fend off competition from fierce rivals such as Amazon.com Inc. (NASDAQ: AMZN).
US small businesses to sell on Alibaba
Prior to the announcement US businesses could only manage to purchase items on the Alibaba platform which boasts a good number of customers from the US. About one third of the company’s buyers are from the US with a considerable proportion of sellers of up to 95% being from China.
The move is expected to open up market to United States sellers in various countries such as Brazil, India and Canada. Equally US merchants will get the opportunity to reach the vast US market as they will be able to equally sell to US-based businesses.
Alibaba’s move to allow US small businesses on the platform comes at a time when the Chinese company is facing waning e-commerce revenue growth which has even been complicated by the on-going trade war between the US and China. The company is equally facing growing competition from competitors such as Pinduoduo Inc. (NASDAQ: PDD).
Alibaba expects to win manufacturers, wholesalers and distributers
The company does not have its own inventory and it is optimistic that it will win small businesses to their platform. Alibaba has indicated that its aim is to win over manufacturers, wholesalers as well as distributors.
In the next three years the company is looking to double the international brands they offer on the platform taking it to 40,000. As a result the company launched an English language website last month for the Tmall Global marketplace as a move of appealing to merchants.
Amazon for instance is ahead of Alibaba because besides offering its own inventory it equally allows third party vendors to offer their products on its website. Vendors can also store their products in Amazon warehouses as well as ship directly to clients.
