Alibaba launches US network to ease small manufacturers’ access to 500 million customers

Capping off a series of US events, China’s e-commerce giant established its Taobao Global US Merchants Network with more than 300 merchant members

PUBLISHED : Tuesday, 11 July, 2017, 1:14am
UPDATED : Tuesday, 11 July, 2017, 1:16am

China’s e-commerce giant Alibaba announced its launch of a US business network that connects small-scale manufacturers to US companies already selling to Chinese consumers on Alibaba’s Taobao sales platform, providing easier access to more than 500 million consumers.

Following a series of US events aimed at bringing more small- and medium-sized enterprises (SMEs) onto its e-commerce platforms, Alibaba established its Taobao Global US Merchants Network with more than 300 Taobao Global merchant members, according to a company announcement.

These merchants can sell products made by small- and medium-sized US companies to “more than half a billion consumers on Alibaba’s platforms”, it said.

Alibaba aims to have 2 billion customers buying on its platforms within the next 20 years, Alibaba Vice President Brian Wong told reporters ahead of the company’s Gateway ‘17 event in Detroit last month, where the company’s chairman Jack Ma welcomed thousands of US SMEs.

“That’s not something we could achieve if we stayed in China. We need to go global,” Wong said, adding that Alibaba is aiming to derive about 40 per cent of revenue from international transactions within the next five years. Alibaba is the owner of the South China Morning Post.

The US merchants network effort also aligns with a pledge Ma made in January, when he met US president-elect Donald Trump, to boost US employment.

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In their 40-minute meeting at Trump Tower in New York, Ma said he shared ideas with Trump about ways to improve trade, and offered Alibaba’s platforms to support up to 1 million US vendors to sell to China and Southeast Asia.

US small businesses on the network will have access to a centralised platform, “where they can connect with and sell their products to experienced Taobao Global merchants who sell to Chinese consumers”, according to the Alibaba statement.

Alibaba’s efforts to connect US SMEs with consumers in China solves many operational challenges that small companies might not be able to surmount on their own, David Martin, a global strategy service line leader with Deloitte, said in an interview with the Post during Gateway ‘17.

“It’s really hard for very small companies to get on e-commerce platforms in China,” Martin said. “There are supply chain questions, tax questions, regulatory questions, marketing strategy questions as well as the execution of the operation.

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“From the outside, this feels impossible,” he said. “Ultimately, Alibaba is trying to address the fear of the unknown.”

Alibaba will also organise training seminars on a regular basis on logistics and other ecommerce issues to help merchants in the network better identify industry trends and improve the experience for US suppliers and Chinese consumers.