February 11, 2014 3:37 pm

Alibaba to launch US ecommerce site


Alibaba, the Chinese ecommerce company that has long connected US brands to Chinese suppliers, now wants to help sell goods to American consumers.

The company, which is poised for an initial public offering that analysts say could value it at more than $100bn, announced on Tuesday that it will launch its first majority-owned ecommerce venture in the US.

Two of Alibaba’s US subsidiaries, Vendio and Auctiva, will soon launch a business-to-consumer site, 11 Main. Alibaba did not give further details about 11 Main beyond describing it as a boutique ecommerce platform selling “interesting quality products” from “handpicked shop owners”.

The move is the latest by Alibaba to seek additional sources of growth. Alibaba’s sites control 80 per cent of China’s ecommerce, and revenues from those sites last quarter grew by more than half to $1.78bn, but the rate of growth has slowed since last year.

Earlier this week, it made an unsolicited bid to take private AutoNavi, in an all-cash deal that valued the mapping company at $1.6bn. The deal would allow Alibaba to improve its mobile commerce capabilities. Alibaba is also expanding into wealth management services and taxi hailing apps in China.

Alibaba now markets in the US mainly using Aliexpress, an English language website intended to connect US businesses with wholesalers in China. It operates mostly in emerging markets such as Russia, India, Chile and Brazil as well as the US.

A person with knowledge of the 11 Main launch cautioned against portraying it as a foray by Alibaba into the US, saying that despite having full ownership the venture will be run independently by its two subsidiaries.

“Alibaba is happy to support 11 Main” Alibaba said in a statement. “Alibaba is run by entrepreneurs and firmly believes in supporting entrepreneurs with great vision and a strong sense of mission for their companies.”

Alibaba’s Tmall and Taobao ecommerce platforms account for nearly 5 per cent of China’s total retail trade, according to a report by GK Dragonomics and RedTech Advisors, two China based consultancies, last year.

However, it faces stiff competition in its home market, where rival Tencent has sought to leverage its popular messaging service – known in English as WeChat – into a bigger foothold in ecommerce.

Alibaba has been keen to expand overseas by offering more of its ecommerce and payments products to overseas users. Last month the group took a $15m minority stake in 1stdibs, a luxury ecommerce platform. The group earlier spent $200m on a minority stake in ShopRunner Inc, a US retail site.

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