OK, so the confetti has fallen and the stock price has soared. Now that Alibaba has gone public and made those able to get in on its IPO ahead of time immeasurably wealthy and now that those retail investors that bought at $93 dollars per share are immeasurably nervous, what comes next for the Chinese ecommerce monster in the United States?
We are going to focus on the US marketplace 11Main which is still only available to consumers who sign up and merchants that are invited to participate. Using those freshly raised IPO dollars to support the operations and marketing of 11Main to American consumers will in large part dictate Alibaba’s success here. It is widely reported that 11Main is charging roughly half the going commission rate compared to other major marketplaces like Amazon. If this is true and the small retailers using the platform pass those savings on to the consumer, then retail truly is going to change here. Will it impact Amazon?
Alibaba is the only ecommerce player that can conceivably challenge Amazon for supremacy in the third-party marketplace arena. With commission rates as low as 3.5%, 11Main seems poised to challenge eBay (to which it is more similar) and Amazon – who is drawing the ire of some third – party sellers who have experienced increased fees the past few years. What remains to be seen is how much attention Alibaba pays to the US market, given its focus on Chinese growth opportunities and world-wide growth opportunities. We think it will pay a lot of attention and we think brands and retailers should take notice.
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Joe Scartz is the President of Digital BrandWorks