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Alibaba and JD.com set their sights on the USA

March 12, 2019

China’s primary e-commerce companies, Alibaba and JD.com, are attempting to plumb the U.S. market, and are doing so by employing a campaign of partnering with local businesses.

As Yahoo! Finance reports, their home country’s $1 trillion (€886.9 billion) online market “may not be enough” for China’s two foremost e-commerce platforms, which, “against the backdrop of China-U.S. trade tensions”, have been stepping up efforts to penetrate the U.S. markets.

Both companies have opted to do so by forming strategic partnerships with American businesses. JD.com has linked up with Google, while Alibaba has opted to join forces with Office Depot. As a result, “Small businesses who spend over $200 (€177) on Alibaba can receive exclusive offers on officedepot.com and in Office Depot stores” throughout America.

“To me, this is a huge opportunity for both companies to bring I think a unique value that could compete against the other guys in North America,” said Office Depot CEO Gerry Smith.

John Caplan, Head of Alibaba’s North America B2B, has expressed his belief that the union between the two companies “will be complementary”.

“Why can’t I have a one stop summation for my customised goods and for the supplies I need to operate my business every day? That’s a customer first approach,” said Caplan.

As for JD.com and Google, in June 2018 Google announced it was making a $500 million (€443.4 million) investment in the Chinese e-commerce company. Subsequently, “there are currently more than 1,000 products listed on Google Express from Joybuy, a JD.com-owned English shopping website for overseas customers”; these products include electronics.

JD.com, which is renowned in China for its speedy delivery service and its “extensive supply chain”, has promised to provide “a more seamless experience for U.S. customers”.

“Obviously we don’t have that same kind of infrastructure in the U.S., we’re looking at what we can do to get something close to the kind of shopping experiences we want to have,” explained a JD.com spokesperson.

Despite both JD.com and Alibaba’s efforts, however, it is uncertain whether they will be successful in their U.S. campaign. While, in 2019, China is predicted to generate “nearly 56 percent of all online retail sales globally”, the U.S. market is forecast to contribute just 17 percent, reveals an e-Marketer report.

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