Alibaba in major initiative to court China consumer for U.S. retailers
By Edwin Chan, Paul Carsten and John Ruwitch
SAN FRANCISCO/BEIJING/SHANGHAI (Reuters) - China's Alibaba Group Holding Ltd (BABA.N: Quote) plans a major move to win U.S. business this year, by offering American retailers new ways to sell to China's vast and growing middle class.
Anchored by Alipay, the dominant Chinese electronic payments system that works closely with Alibaba and is controlled by its executives, the world's largest Internet retailer is using the calling card of China's consumers to attract U.S. partners, two sources close to the company told Reuters.
Long seen as the most potent threat to Amazon.com Inc (AMZN.O: Quote) with $300 billion in global sales, the moves add up to a conservative approach to expanding in the United States, contrary to industry speculation that the company may be plotting a direct assault on U.S. soil.
That considered strategy, outlined to Reuters for the first time by the sources and executives who work directly with the Chinese company, is intended to heighten awareness in the United States of what Alibaba does, gain goodwill in an important Western market, and lay the groundwork for a longer-term play.
At the heart of its push are Alibaba's and Alipay's trial deals to handle Chinese sales, payment and shipping for some of the biggest names in U.S. retail from Neiman Marcus Group [NMRCUS.UL] to Saks Inc. Both confirmed the agreement but would not talk about how the pilots are faring.
The Chinese companies will also work with U.S. startup Shoprunner, an online mall for U.S. retailers in which it owns a stake, and retail services provider Borderfree Inc BRDR.O to court Chinese consumers.
And Alibaba is preparing a marketing campaign to raise awareness among U.S. businesses of its global business-to-business wholesale platform, Alibaba.com, so they can buy and sell to and from global suppliers.
"They own the toll road into China," said Michael DeSimone, Chief Executive Officer of Borderfree. "What really puts the jetpack on things when you deal with an Alipay is, they're on the ground and they know the Chinese consumer so well." Continued...