|EcommerceBytes-NewsFlash, Number 2355 - August 25, 2010 - ISSN 1539-5065 1 of 2|
In 2005, Meg Whitman said, "Whoever wins China, will win the world" as eBay invested $100 million in China. Five years later, it looks like Meg could not have been more right. eBay lost to Alibaba in China, and now it is Alibaba's turn to invest $100 million in the U.S., acquiring two major eBay vendors in the last three months.
Alibaba.com CEO David Wei spoke to AuctionBytes on Tuesday after the company announced it had acquired eBay service provider Auctiva and talked about what this news would mean for online merchants. The Chinese ecommerce firm had also acquired Vendio in June and is using the platform to encourage sellers to source product from its AliExpress.com marketplace.
A term Wei used throughout the interview was "enabler." He said Auctiva and Vendio are enablers that save merchants time and help them be more efficient. By helping their sellers source products on AliExpress.com, both companies could enable merchants to improve margins between 30 - 40 percent.
Auctiva is twice as big as Vendio in many respects. Auctiva drives over $5 billion in GMV annually compared to Vendio's $2 billion. Auctiva has 170,000 active users compared to Vendio's 80,000 users. And because Auctiva is more sticky (merchants spend more time on the site), Wei believes sourcing integration will happen faster there as are merchants are exposed to more sourcing opportunities.
Becoming a Marketplace Not a Priority
Wei said every merchant benefits from multi-channel selling, and that is something Alibaba.com supports. Alibaba.com, Auctiva and Vendio are experienced at enabling merchants, not consumers.
"The last thing we will do is become a channel for the merchants. We'd rather be an enabler for multichannel distribution, an enabler to improve margin, and an enabler to improve efficiency for the merchant."
Dropshipping: Build, Buy or Partner
eBay and Amazon
John Donahoe will have an opportunity to let Alibaba know exactly how he feels about the acquisition of two of its major third-party vendors. He's scheduled to present a keynote address at Alibaba's annual conference in Hangzhou, China in September on the future of global ecommerce and the opportunities and challenges facing small businesses entrepreneurs.
Merchants love the inventory Alibaba.com can help provide, he said, but need some courage to take the first step towards importing goods. With Auctiva and Vendio working together, the service is assured, instead of "googling" a supplier in Asia, they can expect a different experience.
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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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Alibaba Comments on Vendio and Auctiva Acquisitions - November 12, 2010
Alibaba to Ultimately Compete with eBay in B2C Space - September 27, 2010
Alibaba and California Governor Announce Emerging Entrepreneur Initiative - September 13, 2010
Alibaba Sets Sights on US Markets, Says China Expert - September 13, 2010