Alibaba Makes it Easier for U.S. Retailers to Sell to China’s Consumers
China-based E-commerce giant Alibaba is currently making efforts to win U.S. business, by offering US-based companies simpler and easier ways to sell to the vast and emerging consumer market in China.
With its new platform called Alipay ePass, the company allows Western brands to use the existing E-commerce site to directly serve Chinese shoppers. Alipay ePass is designed to eliminate the shipping and payment difficulties that arise from not having a physical presense in China.
According to a new report from Reuters, the latest move is part of a bigger plan that includes enhancing Alibaba’s credibility in the United States, heighten awareness among U.S. businesses of how it works, and lay the groundwork for a longer-term operation.
The Chinese giant, which is long considered as the most potent threat to Amazon.com Inc, raised nearly $22 billion last year after it launched history’s biggest technology IPO in the US. At the time, the company’s founder, Jack Ma, and other executives said that establishing Alibaba’s presence in the US is one of their top priorities.
Though U.S. retailers have been selling direct to Chinese consumers through a marketplace called Tmall, the results have not been convincing. The is mainly due to the logistic issues that arise from the transaction system.
Alipay ePass is, however, expected to bring an end to all these issues as it will allow both U.S. retailers and Chinese consumers to avoid difficulties associated with foreign exchange, and provide a smooth channel for product delivery.
The system works in a way that when a China-based customer purchases some product on the site, he/she would pay through Alipay, which would then handle the transaction, convert the currency to dollars and pay the US retailer. That retailer would then ship the product to an Alipay facility in the states. That facility would handle the logistics of getting the product to the customer in China.
Alipay works with a wide range of international banks and financial-services companies, including MasterCard and Visa.
Alibaba and Alipay have already started trial deals to handle payments and shipping to China for various major department stores, including Neiman Marcus Group and Saks Inc. Both these companies have confirmed the deal but would not talk about how the pilots are faring.