NEW YORK — Ever since Wall Street’s interest in Chinese e-commerce giant Alibaba reached a fever pitch last year, investors and analysts have focused on one major question: When will the company expand into the US and take on Amazon and eBay?
Jack Ma, Alibaba’s charismatic founder and executive chairman, visited New York this week to try to dispel that notion.
“When are you going to come to invade America?” Ma joked, during a Tuesday speech before the historic Economic Club of New York at the Waldorf Astoria’s Grand Ballroom. Instead, he countered, “The strategy for us is helping small business in America go to China, sell their products to China.”
While that pitch to help small businesses sounds positive and uncontroversial, US onlookers and competitors could be excused for not believing Ma. The US retail market remains the largest in the world — with China coming in second — so it’s not a stretch to think Alibaba’s long-term plans could eventually include coming to America. That means Amazon, eBay and others may someday be facing a major, new competitor on their shores and US consumers will get to know the name Alibaba.
For now, the company has been positioning itself as a partner for US businesses, hoping it can act as a bridge for them to reach the Chinese market and become a more influential global retail player along the way. To do that, though, Alibaba needs to build trust with US retailers and not appear as a rival.
“I think a lot of this is time frames,” said Scot Wingo, executive chairman of ChannelAdvisor, which provides research and other tools for online retailers. “I think right now [China is] definitely their priority. I think two years from now I’d be shocked if they didn’t have a more direct US presence.”
Alibaba’s focus on small US businesses makes sense in the short-term, Wingo said, since many retailers using Alibaba’s websites have told his company they don’t have enough inventory of Western goods to meet the surging demand of their Chinese customers. ChannelAdvisor is a partner with Alibaba’s Tmall Global, which helps import products to China.
Today, Alibaba makes nearly all its revenue in China and has little exposure to the US. The company opened online retail site 11 Main in the US last year and has a handful of investments in US businesses. While that’s not nearly enough to interest most US customers, Wall Street last year swooned for Alibaba — the largest e-commerce company in China — when the firm raised $25 billion on the New York Stock Exchange, pulling off the biggest initial public offering ever.
Ma doesn’t plan to stop there, saying his goal is to make his company bigger than Walmart and eventually generate annual gross merchandise volume — the total value of goods sold on Alibaba’s websites — of $1 trillion. To get there, though, Ma and Alibaba will likely need more partners.
“We did not come here to compete,” Ma said Tuesday. “We come here to bring the small business.”
Source: Alibaba chairman: No, seriously, we’re not competing in the US – CNET