Alibaba, the Chinese e-commerce company, is bigger than Amazon and eBay combined, but had no US website — until now. The new website is called 11Main.com, and it is an invitation-only marketplace that will focus on products from small businesses. Alibaba is bringing a new angle to the American market, along with worry for several companies.
Calling Alibaba the Chinese eBay can be a little misleading. If there is any comparison, the website’s business model best resembles Google.
Alibaba functions as a shopping search engine to enhance the online presence of smaller businesses, and takes a fee off of each transaction. Amazon and eBay, on the other hand, have become quasi-retailers that rely on retailer fees and ads. 11Main.com will bring Alibaba’s style with an American twist and hopefully give shoppers a new kind of experience.
11Main.com will feature hundreds of thousands of products from 1000 – 2000, mostly up-scale, US-based small businesses vetted by Alibaba. The website will focus on high-priced goods in fashion, tech, and jewelry. Some analysts believe the small website will have difficulty in the packed American marketplace.
“US e-commerce is crowded and relies on high marketing expenses to rise above the clutter,” according to Forrester analyst Sucharita Mulpuru. Alibaba’s hopes are high, but the reality might be overwhelming.
Nevertheless, the company may have chosen the perfect time to enter the US market as Amazon’s popularity has been rocked by allegations of poor labor conditions and contract disputes. In the most recent spat, Amazon halted pre-orders for some Warner Bros. movie discs, a similar tactic used against Stephen Colbert of The Colbert Report, when the company used it against Colbert’s book publisher. Hachette.
Amazon’s bullying will prompt some customers to look for an alternative.
At the same time, Alibaba will create even more buzz with its long-anticipated IPO, what could be one of the largest IPOs in Internet history. The company is expected to be valued at 140 billion dollars, while eBay, by comparison, has a market-cap of about 70 billion.
How much of that money will be reinvested into Alibaba’s American ventures? It’s hard to say, but 11Main has the resources to go from a small boutique website to American colossus.
Although the 11Main website strikes fear into eBay and Amazon, small businesses, at least the ones that are invited, love the idea of a new home for their products.
“There are many small shop owners that are looking for broader platforms, but when they look at the broader platforms, those are not necessarily structured to support their brands or their identities,” according to 11Main president Mike Effle.
Instead, websites like Amazon have become their own brand.
In addition, the transaction fee will be 3.5%, about half what the other marketplaces charge.
Alibaba’s 11Main US website will provide the experience and support the boutique community has been craving for.