Alibaba, the owners of the world's largest e-commerce platform, is now setting its sights on the United States as part of its push to expand its international business.
The Chinese e-commerce giant announced that it has opened its new business-to-business (B2B) online marketplace to US companies, which means that it will be going head to head with its US rival Amazon.com in the particular space.
The opening of its Alibaba.com platform to US firms is the company's latest push to grow its business outside of China. US companies such as manufacturers, wholesalers, and distributors will now have access to the platform to buy and sell products from other US companies and international businesses.
The Chinese company's move comes at a delicate time in the geopolitical stage as the US and China continue their already year-long trade dispute. Tensions between both nations have increased and subsided following different events throughout the past month, but trade and economic issues still linger, barring an amicable trade agreement.
Alibaba recognizes the difficulties of opening its B2B platform to the US. The company's president Michael Evans announced on Monday that Alibaba is continuing its push to build its US business despite the trade dispute between China and the US. However, Evans cautioned that they will be doing so very "carefully."
Evans revealed that the company has already approached the US government to explain to them what they are trying to do in the country. The executive explained that the nature of the launch is sensitive as it will involve the trade of technologies that the government is not very comfortable with.
With the launch of the English portal for its B2B platform, Alibaba will now be directly competing with Amazon's own B2B platform called Amazon Business. Alibaba's platform is separate from its retail e-commerce platforms as it directly targets businesses, similar to Amazon Business.
To make its platform competitive in the US, the company's head of North America B2B, John Caplan, explained that the Alibaba will be offering customers a flat membership fee. This will be particularly attractive to some customers given that B2B sites like Amazon do take a cut from the sales that are made on their respective platforms.
Amazon Business currently charges clients a minimum of $39.99 per month for its basic wholesaler account. While the price may be cheap, the company does take a 15 percent cut of client sales generated from the platform. Alibaba will be charging a much more expensive one time fee, likely more than a thousand dollars each year, but it will not be taking any commissions from sales on its platform.
