Dive Brief:
- Alibaba has established a Global US Merchants Network for more than 300 Taobao Global members in order to create a buyer base of consumers on Alibaba's platforms for products made by small- and medium-sized US companies, the South China Morning Post reported.
- Alibaba's goal is to recruit roughly 2 billion customers by 2037, a goal that company executives believe requires a global platform. It also seeks to earn approximately 40% of revenue from international transactions by 2022.
- Small and medium sized US businesses on the network will gain access to a shopping platform which allows them to sell their products to Taobao Global merchants, who in turn sell to Chinese consumers. Training seminars on logistics and other e-commerce complexities will be held in order to support network merchants understand industry trends and thus have a better chance of success.
Dive Insight:
Alibaba CEO Jack Ma is working hard to forge links between Chinese consumers and American sellers and manufacturers. In Detroit this past June, Mr. Ma hosted a tips seminar for how American producers can crack the Chinese market via its Taobao platform.
However, reactions among Americans were mixed, according to The Wall Street Journal. Some sellers, though already secure on Amazon and eBay, seemed eager to branch out, but others hesitated, citing the wealth of fakes and forgeries rampant on the Alibaba site. To counter those concerns, executives from Taobao, the segment of Alibaba devoted to goods produced by small and medium sized vendors, pledged renewed policing of the site. They also offered suggestions to American sellers to help avoid copycatting.
The Detroit seminar marked Alibaba's most direct attempt to reach the American market. Previously, Alibaba had already extended a welcoming hand to Danish cargo carrier Maersk through its OneTouch booking website for vendors wishing to reserve advance slot or shipping space, a gesture seen to add convenience as well as extend services and supply chain controls. Meanwhile CMA CGM — Maersk's French competitor — also works with the Chinese e-commerce site via a Memorandum of Understanding (MoU). Alibaba customers have the same option with CMA CGM as with Maersk: to reserve advance space for overseas shipping. The MoU benefits CMA CGM (and Maersk) by increasing access to small but numerous shippers, while shippers benefit from the security of saved space and a diminution of brokerage fees paid to freight forwarders.
