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Alibaba Group
China-based e-commerce giant Alibaba has a new service that’s meant to make it simpler for companies in the United States to sell their products to China’s consumers.
The goal of the platform — called Alipay ePass — is to eliminate barriers to market that come from not having a physical presence in China, such as shipping difficulties and converting dollars to yuan.
Reuters reported on the plans earlier Friday.
Alibaba made a splash in the US last year after launching the biggest technology IPO in history, generating nearly $22 billion. Though much of Alibaba’s success has come by way of China, the company’s founder, Jack Ma, and other company executives have said that expanding Alibaba’s presence in the US is paramount to its plan.
Alibaba is essentially an Amazon-eBay mashup, consisting of everything from a consumer-to-consumer marketplace in the form of Taobao and a direct-to-consumer e-commerce store, called Tmall.
Over the last several years, US-based companies have been selling direct to Chinese consumers through Tmall, but the results have been tepid, in large part because of the logistical issues that arise from the transaction to the ultimate delivery.
Alipay, which was founded by Ma and started through Alibaba Group, is the preferred transaction platform for consumers in China and works with a wide range of international banks and financial-services companies, including MasterCard and Visa. It’s also central to Alibaba’s effort to help US companies sell to China.
A business-focused document containing information on Alipay ePass explains how the platform would let American brands sell products to Chinese customers through their online stores. When a China-based customer makes a purchase on a site, he or she would pay through Alipay, which would then handle the transaction, convert the currency to dollars and pay the US retailer. That retailer would then ship the product to an Alipay facility in the states. That facility would handle the logistics of getting the product to the customer in China.
Under the current system, US-based companies need to jump through hoops to get a product to China. They first need to have a presence to attract consumers and then accept payment and convert the currency. They then need to ship the product to China, clearing customs and incurring charges along the way. Those barriers have prompted larger corporations to set up shops in China to handle transactions in the country and others to simply not even try.
Alibaba has already started testing the service with several major companies, including luxury retailers Neiman Marcus and Saks Fifth Avenue, as well as Macy’s, Ann Taylor and e-commerce site Gilt. Alibaba plans to launch a marketing campaign in the states this year to attract more businesses to sell to China’s 300 million consumers.
Alibaba shares are up 25 cents, or 0.26 percent, to $96.56 in early trading Friday.
Update, 1:04 p.m. PT: Adds new information on Alipay ePass.
