Alibaba Group’s international wholesale unit, Alibaba.com, accounts for just 2% of the giant ecommerce company’s revenue — but it’s one of the stars of the corporate empire. Revenue on Alibaba.com jumped 29% year-over-year to $760 million in the quarter ended Dec. 31 on the strength of a 50% increase in transaction value, the company says.
Hangzhou, China-based Alibaba Group doesn’t release its B2B gross merchandise transaction value figures, but John Caplan, Alibaba.com’s president for North America and Europe, says a big part of the recent growth came from B2B ecommerce transactions in the United States.
“Our business is robust here in North America,” Caplan, based in New York City, tells Digital Commerce 360. “The demand for ‘Made in USA’ is surging around the globe.”
Nor does Alibaba release the number of U.S. B2B companies on Alibaba.com, but it says more than 200,000 suppliers are in its ecommerce marketplace globally. Alibaba opened its ecommerce platform to U.S. manufacturers, wholesalers, and distributors in July 2019.
“Today, the United States is one of the fastest-growing seller regions on Alibaba.com,” the publicly traded company said in a recent investor presentation.
Alibaba.com’s U.S. ecommerce merchants are seeing especially strong demand for agricultural, food, health-and-beauty, electronic, and medical products, according to Caplan.
“It’s largely things that go on your body or in your body, or high in technical sophistication,” he says.
The COVID-19 pandemic that hit in early 2020 spurred demand for U.S. outdoor-related products, but according to Caplan, Alibaba.com’s continuing B2B growth is independent of the pandemic.
“There’s the rise of the digital entrepreneur,” he says. “It used to be if you were a manufacturer or wholesaler, you essentially did business as far as your salespeople could drive in a day.”
Today, however, more B2B companies, even small ones, are discovering the revenue potential of cross-border ecommerce, Caplan says. A December Alibaba online survey of 2,401 U.S. small and midsized B2B merchants — those with 500 or fewer employees — found that 70% had engaged in international trade, up from 63% in September 2020 and 59% in December 2019, as noted in similar Alibaba surveys.
“I think the pandemic accelerated the transition,” says Caplan.
He adds that Alibaba.com’s suite of software and services serving buyers and sellers throughout the world are designed to ease that transition.
Those services include logistics, pay-for-performance online marketing, and what Alibaba calls Trade Assurance, a free payment and order-protection service for a business to pay suppliers using various payment methods and channels. To protect buyers, payments are held in escrow until goods are received and confirmed as to what was agreed with the seller.
On March 1, Alibaba kicked off its annual “March Expo,” a monthlong virtual event to acquaint B2B buyers and sellers with new products, services, and expansion opportunities. The event features live-streaming and virtual-reality showrooms, and “deliver-by” dates for 300 million products. Caplan says Alibaba.com also is working to expand its Pro Buyer program for its bigger B2B merchants, which includes a number of payment, fulfillment, logistics and other services for businesses making large ecommerce orders.
Asked who Alibaba.com’s direct competitors are, Caplan wouldn’t name such players as Amazon.com Inc., saying Alibaba has carved out a unique place in the ecommerce marketplace.
“There isn’t an Uber/Lyft comp you can make here,” he says, referencing the leading U.S. ride-share firms. “We’ve digitized the entire transformation of how B2B business works. Our [platform] is the most global, with the most number of services.”
Alibaba.com’s expanding B2B reach is welcome news for its parent company, which is facing new curbs on some of its activities as China’s Communist government tries to curb the growing power of the country’s huge private-sector tech firms. Caplan declines to comment on the issue. But he notes that Alibaba Group chairman and chief executive Daniel Zhang said on the company’s recent quarterly earnings call that supporting the “industrial digitalization of our customers” is one of Alibaba’s biggest opportunities for long-term growth.
Jim Daly is a Mount Prospect, Illinois-based freelance journalist covering business and technology.
Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at [email protected] and follow him on Twitter @pdemery.
Follow us on LinkedIn and be the first to know when new Digital Commerce 360 B2B News content is published.