Alibaba’s New U.S. Shopping Site Seems Like a Giant R&D Experiment
Alibaba unveiled its first shopping site in the U.S. on Wednesday, but the launch of the online market called 11 Main comes across more as a playground for experimentation than a shot across the bow at big U.S. e-commerce companies.
The site, which launched in a beta form today, is an online destination where more than 1,000 small business owners can sell their wares. The site is not focusing on a single niche, though, instead displaying products from categories as diverse as fashion apparel, print books, jewelry and antiques. The wide variety of selection is supposed to mirror the commercial diversity of Main Street USA, 11 Main’s president Mike Effle said.
That approach, though, makes it hard to imagine how 11 Main will go about making any significant inroads against the marketplaces run by Amazon, eBay and even the craft-heavy Etsy. Those sites already sell across a wide array of categories and have large — even giant — audiences.
Perhaps the supply side of the marketplace equation won’t be a huge challenge, because 11 Main is being run in conjunction with two other businesses that Alibaba purchased a few years back that already have relationships with business owners: Vendio and Auctiva. Each of those businesses sells software tools that help business owners sling their wares more effectively across Amazon and eBay’s marketplaces. And business owners who use those services won’t be charged listing fees on 11 Main.
But what’s the strategy to attract the wallets of online shoppers in the U.S.? Effle spoke about the quality of the merchants 11 Main is choosing to work with, the focus on telling the story of the business owner and an upcoming marketing push as customer acquisition differentiators. The company wouldn’t provide any guidance on the size of the marketing campaign.
On the surface, at least, none of those things stand out as a breakthrough strategy.
Perhaps, however, that’s not the point. Perhaps there’s no real intention to unseat the big players. Perhaps 11 Main is a way for the company to dip its toes into the U.S. shopping marketplace, and test and learn. And then, based on those findings, help the company evaluate what works and what doesn’t to help inform a new strategy … an acquisition strategy.
E-commerce executives and investors love talking about what Alibaba’s U.S. commerce strategy will be. I’ve been hard-pressed to find anyone who thinks Alibaba plans to build a presence here around a site it builds from scratch. Instead, many smart industry folks expect a big acquisition to take place in the next few years. Two names that pop up frequently in conversation: eBay and Etsy.
It’s plausible to think that by launching a shopping site that competes with those potential targets in some ways in the U.S., Alibaba can learn more about the strengths and weaknesses of those and other similar U.S. businesses. Alibaba knows a ton about e-commerce in China; it owns giant players Taobao and Tmall. But the U.S. is a vastly different market.
There’s always the chance that 11 Main could strike a chord with U.S. shoppers and find breakout success. Still, I think there’s just as likely a chance that Alibaba knows full well the odds stacked up against this new site. And if you have big ambitions to own a part of the online retail market here, the best way get a great feel for the industry is to operate your own property at the start. If it takes off, great. If it doesn’t, you put yourself in a position to make smarter acquisition decisions down the road.