Alibaba Plans To Help Us Retailers Enter China

China Alibaba The holding group is planning to take a major action this year to provide new sales channels to US retailers and sell goods to China's large and growing middle class in order to expand its business in the US.

Two people told Reuters that with the help of Alipay, the world's largest online retailer was using Chinese consumers' name card to attract American partners.

The Alibaba expanded in this conservative way in the United States, which is in sharp contrast to the industry's speculation that it may launch a direct attack on the US market. Alibaba, which has a global sales volume of US $300 billion, has been regarded as the most powerful opponent of Amazon.com.

The strategy in this plan is aimed at improving. Alibaba Gaining popularity in the US has gained important goodwill and laid the foundation for long-term development. These were the first time that executives and executives who had interacted directly with the company revealed to Reuters.

The core of the strategy is Alibaba and Alipay's attempt to deal with some of the largest US retailers dealing with sales, payment and distribution for China, including Neiman Marcus Group and Saks. The two companies confirmed the agreement but refused to disclose how to implement it.

Alibaba will also work with the emerging online store Shoprunner and Borderfree, a retail service provider (BRDR.O:) to attract Chinese consumers. Alibaba holds some Shoprunner shares.

Alibaba is also preparing marketing activities to enhance the visibility of its B2B wholesale platform Alibaba.com in the US business, in order to facilitate these enterprises to purchase and sell on the platform.

"They are the main road to the Chinese market," said Borderfree executive director Michael DeSimone. "When you deal with Alipay, what really appeals to you is that they are very popular and really understand Chinese consumers."

The industry pointed out that, not counting the sales of American goods in China, the annual sales volume of us cross-border goods to China is only 15 billion US dollars, and the figure is expected to increase to 1 trillion and 800 billion yuan (US $291 billion) by 2020.

"The current scale is not big, but in the next 12 to 18 months, 300 million Chinese consumers will be able to reach retailers in the US. "Cai Chongxin, executive vice chairman of Alibaba group, said in an interview with Reuters last year." JoeTsai

However, success is still not guaranteed by 100%.

The number of middle class in China is more than 250 million and continues to grow, thanks to the government's policy to promote a shift towards a consumption driven economy. Apple iPhone and General Motors products have become the representatives of best sellers, but for Western companies, the market is still full of challenges, especially for those lacking in global layout. Home Depot decided to close all seven stores in China in 2012. Last December, best buy said it would sell its troubled business in China.

Alibaba spent 10 months helping overseas retailers build stores in China. Its B2C website, Tmall International (Tmall Global), has not responded very well. According to the company, more than 5000 brands and 650 distributors were stationed in the platform, but only 30 sales exceeded 10 million yuan.

However, there are signs of growth at the moment. According to the data provided by Alibaba to Reuters, the Costco Wholesale (Tmall COST.O:), which was located in Tmall international last November, sold more than 40 million yuan in the first month of operation. The store has attracted about 90 million visitors since its launch.

The cross border transaction principle of Ali

One of Alibaba's goals is to dispel the US government's concerns about China's large enterprises. In 2014, the Alibaba appointed James Wilkinson, the former chief financial officer of the United States, to formulate an international strategy. He also commissioned brilliant international to visit a head of international government affairs in Washington.

The Alipay and logistics partners network built in the past few years is the core of Alibaba's entry into the United States.

In China, there are a large number of famous brands such as Nike (Nike Ju, Nike) and so on, which have been directly sold on Tmall. But Alipay has directly bridged American retailers and Chinese consumers, so that they do not need to invest in physical operations.

Alipay also allows us retailers and Chinese consumers to avoid foreign currency related troubles. Chinese consumers pay in Renminbi; American companies get us dollars.

Alibaba and Alipay The solution for American enterprises is called ePass. The service includes customer pre process, that is, a "fast track" to shorten delivery days. Da and analysts John Choi and Alex Liu believe that this function is the biggest advantage of Alibaba relative to Jingdong (JD.O: quotes).

According to Borderfree, Alibaba and Alipay have signed trial agreements with department stores Neiman, Saks, Macy's Inc, M.N: Bloomingdale market, its Bloomingdale department store chain, Ann Taylor, fashion website Gilt, and clothing brand Aeropostale (Taylor market), which is responsible for handling payment and delivery to China. The companies declined to comment, but Neiman, Saks and Ann Taylor confirmed the signing of the agreement.

For example, if Chinese consumers buy a pair of shoes from Saks, Alipay will be responsible for financial transactions. These shoes will enter Alipay's cargo point in the United States and then turn to China. After clearance, the final delivery is usually handled by local partners.

Gilt Tracey Weber, an online retailer, said that with Alipay's trial launch, Alibaba has been providing more and more help in marketing and even product selection.

"This is a very different environment," she said.

On the other hand, Shoprunner hired top Amazon executives last year to set up a new office in Shanghai, and executive director Scott Thompson said that the company is preparing to hold large-scale marketing activities in China in 2015.

Eradicate Shanzhai

Alibaba hopes to attract more American companies to enter Alibaba.com as buyers and sellers. One strategy is to reduce the number of counterfeit goods. Counterfeiting is a major problem in China. It is also an important concern for enterprises to consider sharing intellectual property rights such as technology and design.

To solve this problem, Alibaba hired D&B, an enterprise information company, to strengthen a supplier verification process. Ali hopes that with the help of this program, many small American companies and manufacturers who do not currently carry out business on the Internet will be attracted. At present, the small companies are estimated at 2700.

The validation process will enable both parties to ensure that they are working with legitimate partners.

Jeff Stibel, director of the Alibaba, said that integration has already started and the verification process will be launched early this year.

Alibaba also has some sales plans for American consumers.

Alibaba has a small business platform 11Main.com in the United States. There are many small businesses online selling products from yoga mat to aromatherapy candles. Although this platform is mainly targeted at American consumers, 1/4 of the 1 million 400 thousand products on its website can be shipped to Asia. 11Main.com chief executive Mike Effle told Reuters that the website hopes to eventually help sellers enter Alibaba's sales channel from the us to China.

As Michael Sorrentino realized at last year's Las Vegas consumer electronics show, Alibaba.com itself is a platform for selling goods to American consumers.

Michael Sorrentino is the executive director of Eyepatch, the maker of smart phone shell, and he said that about 20% of American retailers he had talked with asked whether he could buy his products through Alibaba.com.

"This reminds me quickly, whether I am familiar with that platform or not, I want to put the product up quickly," Sorrentino said.