Chinese e-commerce giant Alibaba, announced today that it will allow small businesses from the United States to sell goods on its platform. The company is also planning a tour of the U.S., starting in Brooklyn, to recruit small businesses. The services Alibaba plan to pitch include domestic payments, marketing tools and an American based support team.
This move puts Alibaba into the business-to-business e-commerce market, and in direct competition with Amazon. Unlike Amazon, Alibaba will not charge a commission for goods sold on their website, but instead charge an annual membership fee of $2000, along with any marketing and advertising costs. Previously, Alibaba only allowed U.S. businesses to buy items on its platform.
According to the U.S. International Trade Commission, the B2B e-commerce market is valued at $23.9 trillion, whereas the business-to-consumer e-commerce market is valued at $3.8 trillion.
Alibaba already has deals with several U.S. companies including Office Depot and Robinson Fresh, a food supplier for brands such as Tropicana and Welsh. The company will now give U.S. small business access to buyers on an international level. Businesses will now be able to create their own e-commerce sites on Alibaba and build digital marketing campaigns.
This news comes on the heels of rising tensions between the United States and China including proposed Chinese tariffs on U.S. manufacturing. The majority of Alibaba’s business rests in China, but despite the geopolitical tensions, the company is looking to expand its business in America.
Squaring off against Amazon is nothing new for the Chinese e-commerce giant. Prime Day, Amazon’s two-day online shopping extravaganza, was a response to Alibaba’s Singles Day shopping event, which last year resulted in $30 billion in sales during the 24 hour event. Prime Day in 2018 resulted in only $4 billion in sales during Amazon’s 36 hour event.
Amazon and Alibaba are set to be two of the key players in the growing B2B e-commerce market, resulting in new opportunities for small businesses. With Alibaba, U.S. small businesses will be able to establish an affordable online presence, develop a digital marketing campaign and sell their goods to countries all around the world.