April 3, 2020
Why Alibaba Gave Up On U.S. Consumers

Why Alibaba Gave Up On U.S. Consumers

Alibaba is China’s
largest e-commerce platform. In its latest earnings report,
Alibaba disclosed having 636 million annual active consumers on
its China retail marketplaces. As a point of reference, that’s almost double the entire population of the United States. But despite its enormous Chinese following,
Alibaba is still not a well-known brand to many Americans. There isn’t a lot of reason for
Alibaba to go after the American consumer because their market in China
is just so much bigger. And it’s still growing. When you think about how big the
middle class is and how fast it’s growing, there’s 300 million people in
the middle class that Alibaba can target. That’s more of a market than they
would have here in the U.S. Alibaba first threw its
hat into the U.S. market in 2014, when it IPO’d
at the New York Stock Exchange. At the time, it
was the largest U.S.-listed initial public offering ever,
raising $25 billion. The IPO made Alibaba founder and
chairman, Jack Ma, the richest man in China. Shortly after its IPO, Alibaba tried
to dip its toe into America’s consumer market through an e-commerce
website called 11 Main. The website was shut down just
a year after it launched. Alibaba’s 11 Main shut down after
only one year simply because it wasn’t working. They were coming into a mature
market where Amazon and eBay have dominated for years and they couldn’t
gain any traction with American consumers. Alibaba now says that its strategy has never been to compete with the likes of Amazon and eBay. And the focus has always been
on the American business, not the American consumer. As far as Alibaba is concerned, what we’re doing here in the United States is to help American farmers and small business to sell back into China. To export to China. So, for example, we’re helping
Ocean Spray cranberries and Washington State apples. All those guys that are producing
fruits and farming products selling into China, on our Alibaba platform. That’s a business for us that we
see there’s a lot of potential. And we continue to execute that
strategy here in the United States. Back in 2017, Jack Ma articulated this strategy to then president-elect Trump. Jack Ma has been talking for some
time about trying to help American small businesses sell their goods
on the Alibaba platform. And they discussed that today and here’s how the president-elect and Jack Ma described the meeting. We had a great meeting. It’s jobs, you just saw
what happened with Fiat. Were they are going to build a
massive plant in the United States, in Michigan. And we’re very happy and Jack
and I are going to do some great things. Small business, right? We are going to focus on small business. A few years ago, Jack Ma,
Alibaba’s founder, stood up beside President Trump and said that he was gonna
bring a million jobs in the US. But I think that this number was widely misunderstood. Alibaba was never going to hire a million people in the U.S. These were indirect jobs. Alibaba says that it wants
to facilitate American businesses selling their products to the Chinese
markets, to Chinese consumers. And these jobs were going to be indirect. These companies, because they were growing
in China, would be hiring more, but they were
always through American businesses. But trade tensions between the U.S. and China caused Ma to
back out of the promise. In September of 2018, Ma told
Chinese news site, Xinhua, “the promise was made on the premise
of a friendly U.S. China partnership and
rational trade relations. That premise no
longer exists today. So our promise
cannot be fulfilled.” The comment came just a few days
after Ma announced that he would be stepping down from his role
as chairman of Alibaba. He did add however, that Alibaba
would “not stop working hard to contribute to the healthy
development of China-U.S. trade.” So far, Alibaba has worked
with a number of leading U.S. brands to help them get a
foothold in the Chinese market. Starbucks has a Reserve Roastery
store in Shanghai that offers customers augmented reality experiences
powered by Alibaba’s Taobao app technology. Other American brands like Guess,
Nike and Urban Outfitters use Alibaba’s Tmall marketplace to sell
their merchandise directly to Chinese consumers. Smaller businesses, like Emily’s Chocolates
and Nuts in Seattle and handbag company, Welden, in Connecticut have
also signed on to use Alibaba’s selling platforms. But Alibaba has some
tensions with the U.S. government. It came under fire for
having counterfeit goods on its consumer-to-consumer site, Taobao. The site was listed on the U.S. government’s list of global marketplaces
known for counterfeit and pirated goods two years in a row. For someone living in the U.S., it may be hard to grasp just
how influential Alibaba is in China. Alibaba’s reach today expands
far beyond e-commerce. The tech giant’s realm now covers
cloud computing, digital media and entertainment and even
logistics services. Alibaba is also part owner
of financial services company, Ant Financial. Alibaba is interested in the U.S. consumer, but it’s far more
interested in American businesses. American businesses want to tap this
humungous market over in China. Middle class of 300 million people,
so Alibaba is trying to facilitate American businesses actually going
into China, trying to sell their products to
the Chinese consumer. Which is a very exciting proposition and very valuable, lucrative proposition for U.S. businesses. But that doesn’t mean that
Alibaba will not try again. Alibaba expanding into the U.S. is a pretty long term-priority for the company. I think in terms of their
retail operations, there are much bigger priorities, expanding into
Southeast Asia. They expanded in part through an
acquisition of a company called Lazada. And I think they’re trying
to build out that presence more across India, Thailand,
Indonesia the Philippines. That’s priority number one. I think expanding into Western
Europe and the U.S. is a 5-10 year put.

100 thoughts on “Why Alibaba Gave Up On U.S. Consumers

  1. They want to create a pipeline to Chinese consumers, for American companies. Sounds like a win – win!!! Good for Jack Ma to think about helping both countries.

  2. too bad for Alibaba, China is going down, a smart man like Jack Ma might adapt, but being a communist party member, it's kinda hard

  3. While the American market is alluring, it is not the only one. China already has a huge domestic market and they are developing new ones in 3rd world countries through the Belt/Road initiative. Alibaba's strategy of connecting American corporation and products to the Chinese market should be a win-win if trade relations were not so bad between the two countries. I don't think America's strong-arm tactics work with the Chinese, with that ship having sailed when China became the 2nd biggest economy.
    My sense is that China will move forward with or without the American market. Can the US survive ignoring the lucrative Chinese market?

  4. Whose the crook here? America is, there tell you there will be no social security in 2036 what u paid into

  5. These guys are the GREATEST POKER PLAYERS EVER!

    Here is why they dominate:

    What they say: We are not targeting the US consumer. We are "helping" farmers and business owners sell products to China.

    What they do: Sell the least expensive products to US dropshippers and wholesalers.
    Sell a competeting product for every Amazon listing possible. Break copyright law if needed. (The dummy american dropshipper or Amazon reseller will pay the price)
    They dont need to compete with Amazon or EBay. They use them!
    Amazon is making a killing with them and their private label products. Most products are Fba and shipped right away with Amazon Prime. No need to target consumers since they have locked themselves as the source

  6. Why did Alibaba fall in the US?
    Because US buyers don`t want to wait 1 month for delivery
    It is that simple

  7. A country where there's more middle class than the ENTIRE US POPULATION. Crazy, I tell ya.Just sell one junk there and you could be well off.

  8. No offense, but the e-purchase experience in America is a joke to me compared to China. It took 3 weeks to receive a wallet bought from Amazon. While in China, I can get it next day morning.

  9. we have one already…its called amazon! Hell even ebay! Yeah sell American goods in China on Alibaba…till the government censor's it , or puts tariffs! China thinks it's so much clever then the rest of the world! China has broken to many trade promises ! America needs to break ties with China! The two don't need to do business with each other !

  10. Jack Ma realizes now that it’s one thing to tap into a large market that is neutral to who owns the business, and a whole different ballgame when there’s a large population with animosity in mind. Honorable in trying though.

  11. I found Alibaba difficult to use. Also it wants to market on a wholesale basis. I wanted to leave good feedback and found it difficult to do yet I felt I was dealt with fairly. Far more professional then E-Bay.

  12. Yes alibaba is strong in USA among Smart People. I bought a Guitar and a Ham Radio and other stuff in last 6 Months.

  13. Actually they been trying for years it does not work ,I had experiences buying from ali express and Alibaba unless you are importing large volumes of cheap items to resell via amazon etc is hardly worth it,communication sucks ,you can be waiting for your product for a month or even longer,if the item came broken or you don't like the quality good luck returning it it will take another month ,I guess tahst another big issue if you had a bad experience and is fo rbuying something cheap you don't really go to the process or reordering you simply scrap it and never order again,why would you go through all that hasle when you can order from amazon an ebay and get your stuff in 2- 3 days and you know that if you don't like you can return it quickly and get your money back

  14. So, China has many more cards to play in the trade war. Winning over the small businesses, their finance etc. The American people can easily be bought over. Frightening thought for Trump's re-election.

  15. Is the US a market worth entering anymore?
    SEA, India, SA, Africa etc etc all have increasing amounts of middle class and alot less racism than the US.

  16. Most consumers are NOT going to wait 1-3 months for their purchase to MAYBE show up. I've order stuff there, which came in 4 weeks, and ordered items that after 3 months of tracking updates, apparently were NEVER shipped…. the manufacturers on Alibaba are hit and miss, its a pot luck crap shoot. That is why Americans would rather buy from local retailers who deal with the nightmare buying issues at Alibaba.

  17. Giving up on the American consumer?

    They never give it a try. Taobao, which is far better than 11Main was never available in English, only Traditional Chinese.

    Even though Taobao started using forwarding services to The U.S. in 2017, it wasn’t convenient for Americans consumers Due to the language barrier.

    11 Main was Alibaba’s idea of an English Language Taobao, and it never had anything interesting that would inclined consumers to purchase anything from 11 Main so they all went to Amazon.

    At Amazon, consumers can get interesting goods from sellers based in China, so is Alibaba’s fault they are NOT having that traffic that Amazon gets. It had nothing to do with the so-called Unbalanced ONE SIDED tariffs.

  18. I wanted to start a small business selling make up after trade war started with China shipping costs become unbearable

  19. If the Chinese were smart, they would name one of their large industrial cities "usa" (Oosah) so they can say their products from there were "Made In USA". They could even get away with naming a company "Naci-Rema Corporation", which of course is "American" backwards.

  20. MOST Americans that use Alibaba are business owners or dropshippers. (Please don't click on my face. I'm a germaphobe.)

  21. It makes no sense to be a seller of consumer goods than being wholesaler especially in American market. Where small business and quick trend popular ideas can sell product it’s a game where you have to constantly change and keep up. You want to sell retail goods online? Forget amazon or eBay you got stores that sells their product directly themselves. You even got them silly home shopping network channels. I be wholesaler and bulk buyer to sell into China and international

  22. What is considered middle class in China? If a middle class citizen in the USA earns 10 times what the Chinese middle class earn, then it's not a valid comparison.

  23. There middle class is almost the size of the US population, it's inevitable that they be the next super power.

  24. If you see a company making something that US or europe already done ( like this example, amazon already exosted ) its just like a second chance to buy stocks and make alot of money

  25. Alibaba is riddled with fake knockoff products. I tried using the site but I can’t trust anything on it.

  26. disclose = tiết lộ
    as a point of reference
    go after something = to try to obtain something
    throw its hat into (idiom) = to compete into (a market / elections/ jobs)
    initial public offering = IPO
    dip its toe into a market
    mature market = thị trường đã trưởng thành, vững
    traction = lực kéo
    execute that stratagy = thi hành
    articulate = express idea
    facilitate = tạo điều kiện
    trade tension = căng thẳng thương mại
    rational = lý trí
    so far = cho đến nay
    foothold = chỗ đứng
    augmented reality experieces = tăng trải nghiệm thực tế augment = to increase the value, amount, effectiveness etc of something
    merchandise = commodity, products
    counterfeit goods = hàng giả = fake
    pirated goods = hàng lậu
    grasp = understand
    realm = vương quốc
    humongous = huge, enormous
    proposition = suggestion
    lucrative = profitable
    operation= businesses/ activities

  27. Until recently I lived in Vietnam for over a year! Couldn't use Amazon so, tried Alibaba, it really sucked! Went to Lazada and was a much better experience!

  28. i have spent many thousands of dollars on line with alibaba. Unfortunately many of the chinese suppliers are nothing but liars, They are so happy to sell but have no ethics. Also if you have a complaint against their so called trade assurance to protect your purchase is also a scam. My advice . NEVER BUY FROM CHINA.

  29. Alibaba is bs. U can't just do what ever u want. I bought Alibaba stock when I could have bought Amazon big fu**ing waste.

  30. The customer service is so poor, I did a lot with them but I found DHGate and found better prices and better communication with DH.

  31. Nobody with sane mind in South East Asia bought stuff from LAZADA…. Alibaba should admit that buying LAZADA is their biggest flops yet…

  32. I looked for four things on Alibaba. They didn't have three of them. But Amazon did. I don't know what the draw is…

  33. Alibaba could win the US market as well and the US consumer but it would need to evolve in regards to the internationalization of its workforce and diversify

  34. alibaba has the worst quality products from most Chinese companies.
    i personally order straight from factories.
    they're almost always very willing to help with special requests, such as customization, and the build quality is much higher when ordering directly from the factory. and the price… usually half in comparison with alibaba!

  35. Ms Bosa is naive – Chinese buyers typically buy a few LOW priced items., whereas much greater volume can be had in the NA/EU market.

    It is delusional to think that because the Chinese market is 'bigger' [by head-count] that it is better. A common fallacy.

  36. After HUAWEI you will be dumb to invest in US … and the waste billions of your investment only to be confiscated by them.

    But to be honest through, even before Huawei, If I were China or any other competitor companies, I would be wary of US: not so smart Alstom, Nokia and etc, only to be sabotaged and taken over.

    This isn't how US build an empire? Japan in the 1980s (Get rid of all your competitors before they grow BIG haha. Didn't many people say this is the last chance US can supress China? Trump wants to include HUAWEI in the trade deal. On many occasions, he said “I want to China to do Well but not as well as us." All the Free Market economy propaganda. )

  37. Buying from China is the same as buying fake goods. China should change its name to counterfeit country without morals.

  38. So Alibaba isn't a corporation but a Chinese Communist puppet? I think Alibaba should stop being CCP'S friend and move to another country.

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