Strategic move for B2B ecommerce worldwide market: Alibaba welcomes U.S. small businesses to sell globally on its platform

Chinese e-commerce giant Alibaba Group Holdings Ltd. will allow small U.S. businesses to sell on Alibaba.com, the company said on Tuesday, as it seeks to tap into the business-to-business e-commerce market and fend off rivals like Amazon.com Inc, according to Reuters.

The change will open up markets to U.S. merchants in countries served by Alibaba, including India, Brazil and Canada. U.S. merchants, previously able to only buy on Alibaba.com, can now also sell to other U.S.-based businesses on the marketplace.

Roughly one-third of buyers on Alibaba.com are U.S.-based. More than 95% of sellers come from China.

The business-to-business e-commerce market (B2B) is valued at $23.9 trillion, according to the U.S. International Trade Commission. The business-to-consumer e-commerce market is valued at $3.8 trillion.

“I don’t think they (Alibaba) are trying to benefit financially in the near term, but this does open up a complete new market for their B2B business,” said Daiwa analyst John Choi.

“Alibaba.com was well known as more of a gateway to China’s well-established supply chain for global buyers. Now they are opening this up to U.S. small businesses so they could sell their products,” Choi added.

U.S. sellers have to pay a membership fee of roughly $2,000 to get their online stores on Alibaba.com, plus any marketing and advertising costs, the company said. Amazon charges third-party sellers by the month or per item.

“You get to compete and act like a multinational company in a way you’ve never had the tools or technology to be able to do so,” John Caplan, head of North America B2B at Alibaba Group, told Reuters.

The United States is the first market where the company is focusing on globalizing supply, Caplan said, but Alibaba has a “very clear approach to other markets.”