How Alibaba is getting its name known
Annie Xu, general manager of the US headquarters of China’s e-commerce giant Alibaba Group, said that for 13 years, she and her team have been trying to educate American small- and medium-sized enterprises (SMEs) on how to buy and sell in China.
Their efforts have gradually been paying off. Instead of offering only the flagship business of Alibaba.com, a B2B website, to US customers since the very beginning, Xu said her company is now extensively involved in facilitating sales of US commodities into China, locating and investing in promising entrepreneurial teams in the e-commerce field, offering value-added services to its existing 800 million Alipay users.
“The last two to three years have been defining moments in the development of our US headquarters,” said Xu, adding she has overseen several acquisitions of Silicon Valley startups since 2010. She remains tight-lipped about Alibaba’s widely-speculated possible IPO in the US.
Alibaba’s US customer base has grown exponentially, starting from a humble 100,000 registered users in 2000 to 7.7 million as of June 30 of this year, a yearly growth rate of 54 percent and approximately 263,000 monthly additions through the first quarter, according to Alibaba.
US buyers shop in roughly 10 industry categories: apparel, beauty and personal care, machinery, automobiles and motorcycles, timepieces, jewelry and eyewear, home and garden, packaging and printing, gifts and crafts, construction and real estate, luggage, bags and cases. Most of them use Alibaba.com to source and buy from China.
“Needless to say, China has cheap commodities of high quality, so it attracts international buyers, including a lot from the US,” said Xu.
The US has long been Alibaba’s strategic market, said Xu.
Unlike in China where it is a household name, Alibaba encountered identity ambiguity and confusion along its way in the US.
After Yahoo’s $1
billion investment in Alibaba in 2005, “Americans started to link Alibaba with Yahoo and regard us as an affiliate”, said Xu.
To get the word out, Xu and her team went to trade shows nationwide on a regular basis. “Please,” she would say, “we are not eBay, we are not Amazon. We are really much more than that.”
In 2012, Tmall and Taobao reported joint transactions of $170 billion, which surpassed the combined volume of Amazon and eBay. The recent Single’s Day shopping event on Nov 11 generated a total of $5.7 billion in transactions through the two sites in 24 hours.
“That’s nearly four times the $1.46 billion in online Cyber Monday sales in the US last year,” said Jingming Li, vicepresident and chief architect of Alipay International, a thirdparty online payment service affiliated with Alibaba Group.
Traditionally, Alibaba.com has been the only service offering US clients a connecting with Chinese factories, suppliers or buyers.
For AJ Forsythe, the 25-yearold founder of iCracked, who transformed a tiny on-campus iPhone repair shop into today’s leading on-demand repair and buyback network for iOS devices in the world, it has been “quite a ride”.
Attending California Polytechnic State University in 2010, Forsythe used to stay up until dawn in the school library fixing students’ broken iPhones.
Forsythe happened to come across Alibaba.com and found six regular quality suppliers through its customized sourcing features. iCracked now has 100 stores nationwide and hires 400 technicians. In 2012, it reported $2 million in revenue and expects to reach $10 million this year.
Forsythe said Alibaba.com has made being an entrepreneur easier.
This year, Alibaba US, in conjunction with the US Department of Agriculture’s trade office in Shanghai, used the presale channel of its Tmall (B2C) website to connect American farmers and fishermen with Chinese consumers.
The goal of the joint initiative, according to Xu, is to give Chinese customers access to a variety of US products. The promotions featured more than 60 food categories including Boston lobster, Alaskan wild salmon and cod, raisins and fresh cherries from the Northwest states of Washington, Oregon, Idaho, Montana, California and Utah, according to Keith Hu, international marketing director of Northwest Cherry Growers.
In 2012, more than 2.2 million boxes of US cherries were sold to China, making China the top export market for the fruit outside of North America. Tmall sold 170 tons of cherries in the summer presale program.
In October and November, Chinese consumers showed even stronger enthusiasm for US food when Tmall announced its presale of fresh and wild-caught Alaskan seafood. Chinese consumers preordered 50 tons of high-end Alaskan seafood during the promotion.
In November, Tmall sold out of Alaskan king crab in two days. More than 1,550 flounder, 1,400 halibut, and 970 black cod were preordered.
“In the first half of 2013, we saw a 500 percent surge in sales of imported food on Tmall,” Daniel Zhang, president of Tmall, said in a news release, “and we are thrilled to be collaborating once again with the US Department of Agriculture to meet the increasing needs of our users.”
According to USDA, US agricultural exports to China reached $546 billion in 2012, up 34 percent from 2011.
Annie Xu, general manager of Alibaba’s US headquarters, has been leading the United States.
13 years of business expansion of Alibaba, China’s No 1 e-commerce company, in the