Have you heard the news about Alibaba’s upcoming IPO?
Keep reading to learn why Amazon sellers should care about Alibaba.
What’s Alibaba?
Alibaba is like Ebay, Amazon and Google all rolled into one. And they’re the world’s biggest ecommerce company. They control 80% of China’s ecommerce.
Alibaba’s ecommerce sites include:
- Alibaba.com – The original site, used today for bulk purchases of everything from clothes and household goods to construction equipment and farming machines.
- TaoBao.com – More than 800 million items.
- Tmall.com – A B2C site focusing on brand name and luxury goods– a huge market in China, as the top 2% of Chinese consumers purchase nearly 1/3 of the world’s luxury goods.
- and many more…
They’re a platform and a marketplace. They’re a place where small businesses create an online presence as well as a place for huge brands to sell. They’re the first choice for hundreds of millions of customers.
Sounds a little like Amazon, right?
Alibaba’s IPO
The big news right now, is that Alibaba is planning an IPO here in the United States.
Estimates have them raising over $20 billion on the first day of trading, resulting in a valuation in the neighborhod of $160 billion dollars. That would result in one of the biggest IPOs in history, even bigger than Facebook which raised $16 billion on opening day.
What’s Coming Next?
Right now, it doesn’t look as though Alibaba has any immediate plans to expand its main sites to the US. But, the fact that they spurned the Hong Kong stock markets to have their IPO here in the US says that they do have their eye on US consumers, even if it is a few years down the road.
But Alibaba has announced a new site specifically for US shoppers, called 11Main. Alibaba says 11Main is aimed at entrepreneurs, which is a little vague, but I think it’s a going to be an attempt for Alibaba to create a new marketplace for 3rd-party sellers, to compete in some way with the Amazon.com Marketplace.
Can Alibaba Compete with Amazon?
To anyone who thinks that Amazon is unbeatable, I have a one-word answer: Ebay.
Ebay was the original ecommerce giant for 3rd-party sellers but Amazon managed to not only compete with them, but for the most part, take over as the #1 marketplace for 3rd-party sellers.
How will Alibaba compete? This article from ReadWrite, lays out a pretty good plan of attack:
- Focus on existing small businesses– those that are being squeezed out by Amazon.
- Emphasize artisinal and small-batch goods: the one category Amazon doesn’t dominate yet.
- Provide options for in-store pickup and local delivery.
The last point, specifically in-store pickup, doesn’t seem like a good strategy. Amazon wins because you don’t have to go to the store. Going to pick something up is a bug, not a feature.
Other than that, this sounds like a solid plan to me.
What’s your take on Alibaba? What would make you start selling on their marketplace? How disruptable is Amazon right now? What’s Amazon’s weakest point?