Alibaba is going toe-to-toe with Amazon in a high-stakes move to grab a share of the U.S. business-to-business e-commerce market.
Alibaba’s platform has previously been available for U.S. merchants to source goods. But the Chinese e-commerce giant is now inviting its buyers to become sellers, offering capabilities including domestic payments, marketing tools, and a U.S.-based support team.
The plan will open up markets to U.S. merchants in countries including India, Brazil and Canada, while U.S. merchants will also be able to sell to other U.S.-based businesses, according to Reuters.
Roughly one-third of buyers on Alibaba.com are U.S.-based, making America the largest source of buyers on the website. More than 95% of sellers currently come from China.
“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,” John Caplan, head of North America B2B at Alibaba Group, said in a news release.
Online business sales have overtaken retail e-commerce sales, with the U.S. B2B e-commerce market expected to be worth $1.1 trillion, compared to the business-to-consumer market’s $480 billion.
According to Yahoo Finance, Alibaba’s move puts it “in direct competition with Amazon in the business-to-business (B2B) online marketplace.” Amazon charges third-party sellers by the month or per item and its Business Prime subscription service includes fast shipping options, purchasing insight and control tools, and payment terms.
Alibaba said it will differentiate itself from Amazon by allowing small businesses to own the data and the customers’ relationship. It also has a different business model, in which sellers pay an upfront membership fee of about $2,000 to get their online stores on Alibaba.com up and running, without commissions in each transaction.
“Our relationship with our sellers is we’re an ally to them,” Caplan said.
So far, a few anchor retailers such as Office Depot and RobinsonFresh have already opened their stores on Alibaba.com.
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