|EcommerceBytes-NewsFlash, Number 2317 - June 25, 2010 - ISSN 1539-5065 2 of 3|
Alibaba announced it would acquire Vendio, a service that helps individuals and small businesses sell on eBay, Amazon and on Vendio-hosted storefronts. The Chinese online B2B marketplace will use the acquisition to encourage Vendio's small-medium businesses to source product from China by integrating with the AliExpress.com website.
David Wei, chief executive officer of Alibaba.com, said that in the long term, U.S. merchants would gain access to Chinese retail markets through Alibaba sister company, TaoBao.com, which is a C2C site in China very similar to eBay. "We believe small-medium business should have as many possible channels as they can afford," he said.
How might U.S. merchants be able to sell in China? Wei referred to Alibaba's new partnership with Yahoo Japan in which Yahoo Japan merchants are able to sell directly to Chinese consumers through TaoBao, while TaoBao merchants can sell directly to Japanese consumers.
"I'm not saying we will definitely copy this model into the US, but it's a possible way for sister companies and Alibaba Group can help merchants cross-sell to different countries. We are in early days to look at how we enable U.S. merchants to sell to China." He said Alibaba.com would be able to assess the 80,000 merchants Vendio has today to determine who has the desire and competitive product offering that would be attractive to Chinese consumers. "Maybe some good California wine," he joked.
Terms Not Disclosed
That makes for interesting math, considering that Vendio had raised $37.7 million by 2002 through an angel round and two VC rounds, and in 2006 it acquired Andale, a company founded by Munjal Shah (now of Like.com). Andale had raised over $60 million, according to "The Auction-APP" (McGraw-Hill). In 2007, rival ChannelAdvisor acquired another competitor, MarketWorks, and while industry consolidation was always expected, the value of eBay sellers as customers never came close to meeting expectations of investors and developers.
Insight into Marketplace Data
Alibaba will gain intelligence into the eBay platform from both a developer standpoint as well as gaining access to seller sales data. Under former CEO Meg Whitman's tenure, Alibaba was considered persona non grata due to its rivalry in China, but Alibaba founder Jack Ma met with eBay CEO John Donahoe last year. If Alibaba can boost sellers' sales through improved product sourcing, it could actually help eBay in the U.S, as Alibaba gives no indication of launching TaoBao or its online payment system in the U.S.market.
Vendio sent out an email to its online sellers informing them of the acquisition. Vendio told merchants it would be increasing its investment in the product, engineering, marketing, and production teams. Alibaba is also giving Vendio sellers $100 in coupons for orders on AliExpress. Any customer redeeming the coupons will also be entered into a drawing where the winner will be awarded 2 free years of Vendio service.
Vendio will retain its own brand name and operations and become a new business unit within Alibaba.com. Mike Effle, current Vendio COO, will assume the role of the Vendio CEO and Rodrigo Sales, current Vendio CEO, will become a strategic advisor to the company.
David Wei said Alibaba has over 12 million small-medium business users globally outside of China, over 19% of them based in the United States, making it the largest market for the company outside of mainland China. "By combining Vendio and Alibaba.com, and, in particular, AliExpress.com, we have completed a new value chain, from B2B2C, to consumer. From supplies in Asia to end-user consumers in the States, by creating value to all three parties involved."
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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