Despite Sale of E-Commerce Site, Alibaba Still Keen on U.S. Market (June 23, 2015)
Chinese e-commerce giant Alibaba has invested millions in various online marketplaces in the U.S., but this week it announced plans to sell its 1-year old U.S. online marketplace 11 Main to OpenSky. In exchange, Alibaba will own a 37 percent stake in OpenSky, a New York-based social shopping site, according to TechCrunch. Launched in June 2014 as a portal for smaller, independent merchants selling boutique items—similar to Etsy—11 Main was viewed by some observers as a springboard for Alibaba’s plans to reach U.S. consumers and perhaps eventually challenge some of the biggest names in U.S. e-commerce, including Amazon and PayPal.
The sale of 11 Main doesn’t mean Alibaba has taken its sights off the U.S. market. Earlier this month, company chairman and founder Jack Ma said he wanted to add 10 million small U.S. businesses to the Alibaba online marketplace, enabling them to sell to China’s rising middle class—a potential market already the size of the entire U.S. population and expected to double within the next decade. Ma emphasized, however, that his company will focus on acting as a bridge to enable U.S. companies to reach Chinese consumers, rather competing with incumbent e-commerce providers.
For now, though, it seems Alibaba is doubling down on its home market of China, where it comprises some 80 percent of all e-commerce. The company announced this week that it would invest almost $1 billion into a new venture dubbed Koubei, which will serve as the hub of the company’s online-to-offline commerce efforts. The platform will enable Chinese consumers to make purchases, such as meals, movie tickets and taxi rides, using mobile apps.