This piece was posted in Digital Commerce 360 and is essentially a high-level conversation with Alibaba’s NA head of B2B. It comes as no surprise of course that the Chinese e-commerce giant has interest in the U.S. market. One of the interesting things about B2B e-commerce that many people are not aware of is how the market dwarfs the consumer space. We covered this is a recent report on B2B marketplace disruption.
‘B2B and helping small businesses do business anywhere has been our mission. We see growth potential in helping digitize the B2B marketplace. B2B e-commerce is a $23.9 trillion market—six times larger than B2C ecommerce…..What’s important about the announcement we made this week is how we’re looking to serve this demand. One-third of the buyers on our platform are coming from the U.S.’
The website that Alibaba conducts B2B commerce with is 1688.com, which now includes many sellers in the U.S. attempting distribution in China. Apparently Alibaba has added numerous features to assist in the process, including CRM capabilities, translation services and so forth.
We know that most B2B businesses are not online, we know that they are strapped for time and resources and that their biggest need is getting more customers and revenue.‘We’re still learning and want to hear more from U.S. small businesses which is why we kicked off our Build Up tour—workshops being held across the country where we connect with small businesses in an intimate setting so that we can hear their most pressing needs and also share how they can take advantage of the global B2B ecommerce opportunity.’
The article goes on to discuss goals and the like, and although Alibaba says it is profitable, it does not discuss gross volume. However, the business model seems interesting since it’s about membership and not transaction fees.
‘We’re a one stop platform for U.S. B2B businesses to source and sell globally. Our customer’s success is our success. We require only an annual membership fee, and our business model is one that does not profit from each sale a customer makes—we do not take a commission on transactions.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group