Alibaba, China’s e-commerce heavyweight is changing its US e-commerce strategy. It is folding 11 Main and other companies into OpenSky. The news came this week of the latest actions taken by Alibaba. It has already made it clear that expanding its presence in the US is a priority. It is doing so both by expanding its marketplace footprint and facilitating between Western businesses and customers in China.
Now, the news comes that Alibaba has entered into a deal with OpenSky, an online shopping platform whose headquarters are in New York. The deal is such that 11 Main’s set-up will fold into OpenSky.
Other companies newly acquired by Alibaba will also be folded into OpenSky; these three businesses Vendio, Auctiva, and SingleFeed. Alibaba has had those companies since 2010 and 2011. Once the deal closes, Alibaba will have 37% ownership of OpenSky.
The hope for the partnership, according to a recent statement that TechCrunch obtained from a spokesperson, is to build a robust, independent business with a large inventory (50,000 brands) and shoppers in the millions. Small and medium businesses will be able to reach the masses through the web-based marketplace.
On the downside, 11 Main will be laying off a portion of its workforce as part of the deal. At this point, there has been no news released as to whether or not the 11 Main name will remain as a company or brand. The update this week about Alibaba also speaks to the challenges of a China e-commerce company trying to penetrate the mature US market. It is also clear that China has a strong interest in e-commerce in the US and increasing Western-based business.
Factors driving the China e-commerce market include B2C transactions and B2B sales. And Chinese companies, such as Alibaba, are looking for international growth as they try to expand into the US market.