Jack Ma, the founder of Alibaba Group Holding Ltd., was quoted on several occasions saying “eBay is a shark in the ocean; we are a crocodile in the Yangtze River, if we fight in the ocean, we will lose, but if we fight in the river, we will win.”
In recent years, that crocodile has grown enormous in size and is no longer content with the Yangtze River. It is no secret that Alibaba wants a piece of the ocean; a piece of the North American market. Besides, what is there to fear? Sales from Alibaba’s two e-commerce platforms, Tmall and Taobao, have already surpassed the combined sales of eBay and Amazon.
Alibaba Group Holding Ltd. is an e-commerce business that offers B2B, retail and wholesale of goods, its line of business also includes an online payment system and a shopping search engine among other developing programs.
Unless you are an e-commerce aficionado, chances are, you have not heard of 11 Main. It is the shark that Alibaba has been breeding in captivity to hopefully one day share the ocean with eBay and Amazon. 11main.com is in its beta phase with approximately 1,000 merchants selling products from categories such as apparel and accessories, technology, sporting goods, toys, and entertainment.
More vendors and products are expected before the site is fully launched. It will be no easy task to break into the already crowded U.S. e-commerce space, but the Asian giant has done a few things that will certainly increase its chances at success.
1. Acknowledging the Cultural Difference
Any international expansion is not without its cultural difficulties. Target encountered numerous problems during its first year in Canada partly due to its inability to recognize the cultural differences between the U.S. and Canada.
Alibaba recognizes the significant cultural differences between China and the U.S., and it has taken a number of steps to learn from the locals in order to minimize potential culture-related hiccups.
Back in 2010, Alibaba made the strategic decision to acquire two U.S. companies, Vendio and Auctiva, to provide them with insights and expertise on the U.S. e-commerce market. The two companies later built 11main.com. Alibaba also recruited key e-commerce personnel from eBay, Gap, and Walmart to better understand the market.
2. Unique Products
In the face of a crowded market and fierce competition, Alibaba’s entry into the U.S. market will undoubtedly be an uphill battle. 11 Main plans to stand out in the crowd by offering product differentiation. Instead of bringing over vendors who are on Taobao and who are likely already selling on eBay or Amazon, 11 Main is picking vendors that offer unique and high quality products made in the U.S. The marketplace will sell products from categories such as apparel and accessories, technology, sporting goods, toys, and entertainment.
3. Service Differentiation
While the e-commerce platform can offer many things, one thing it seems to be missing is the personal relationships and the interactive experience that comes with in-store shopping. Alibaba plans to set itself apart by encouraging 11 Main shop owners to not only sell a product, but also their story, their passion, and their point-of-view in order to establish a firm brand identity and to build a one-to-one relationship with their customers. Alibaba is also building a key success feature―social media―into 11 Main by allowing customers to follow shops they like and feel a personal connection with.
This crocodile’s endless ambition for global dominance has led itself to its current path; however, the ever changing global marketplace will undoubtedly present more difficulties for this foreign creature. Will it survive and thrive? We’ll be sure to keep our eyes on them!