Alibaba launches online shop for US
Alibaba launched its first direct-to-consumer online shop in the US on Wednesday, as part of a move to expand more aggressively outside its home market.Development of the new website, called 11 Main, has been led by two of Alibaba’s wholly owned US subsidiaries, with financial and operational support from the parent group, according to the site’s general manager Mike Effle. “11 Main was really inspired by the ‘Main Street’ experience,” said Mr Effle. “We are hand selecting . . . and really telling the story of these shops.”It will operate as an online marketplace similar to Alibaba’s China-based TMall, which offers virtual store fronts to merchants who set their own prices and manage every aspect of their sales apart from payment.
The shop represents Alibaba’s highest-profile foray into the US, but is only one part of the group’s wider strategy there. In advance of its potential $20bn initial public offering in New York later this summer, Alibaba has made a string of investments in US technology companies, with the help of a newly formed team in Silicon Valley. 11 Main is starting with a focus on a limited number of product categories, such as fashion, home and collectable items. Its sellers are mainly small merchants, some operating online-only but some with bricks-and-mortar stores of their own. Sales volumes via the site will increase gradually to help small merchants manage their new business – and customers will be asked to request an invitation to shop before using the site.
At present, the site is working only with US retailers and shipping to US consumers, but Mr Effle left open the possibility that 11 Main could help Alibaba achieve its goal of connecting Chinese consumers with US and other foreign merchants. Mr Effle said the site would not accept payments by Alipay – Alibaba’s PayPal equivalent and one of the most popular methods of online payment in China. However, he did not rule out the possibility of integrating Alipay in the future. Alibaba subsidiaries Vendio and Auctiva, which were acquired in 2010 under an earlier plan to to launch a more business-to-business-focused service, led the 11 Main project.
More recently, Alibaba has made a string of much larger investments in US-based tech groups. In April it participated in a $250m fundraising round for ride-sharing app Lyft. A month earlier it made its largest-ever investment in the US when it put $215m into Tango, a chat app, valuing the business at $1bn.
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