China’s $1 trillion online market may not be enough for homegrown giants Alibaba (BABA) and JD.com (JD). The country’s two biggest e-commerce players are now trying to appeal to businesses and customers in the United States.
Both companies, against the backdrop of China-U.S. trade tensions, have been growing their efforts to expand in the U.S. market by partnering with local companies: JD.com quietly started to sell on Google to consumers and Alibaba has partnered with Office Depot to attract small businesses.
Alibaba, the Hangzhou, China-based online marketplace, announced a strategic partnership with Office Depot on Monday, aiming to provide an one-stop solution for U.S. small businesses who shop for office supplies in the U.S. and source their products from China. Small businesses who spend over $200 on Alibaba.com can receive exclusive offers on officedepot.com and in Office Depot stores across the U.S.
“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,” Office Depot CEO Gerry Smith told Yahoo Finance.
Alibaba’s North America B2B President John Caplan believes the partnership will be complementary because Alibaba focuses on customized manufactured good, while Office Depot mainly sells finished goods like printers.
“Why can't I have a one stop summation for my customized goods and for the supplies I need to operate my business every day? That's a customer first approach,” said Caplan.
Alibaba’s Chairman Jack Ma vowed to create 1 million jobs in the U.S. by helping small businesses in January 2017, a promise he later backed down from because of the trade tension.
JD.com lists items on Google Express
JD.com, China’s second largest e-commerce platform, is taking a different approach. Instead of going after enterprise customers in the U.S., JD.com is targeting the average American shopper.
After Google announced a $550 million investment in JD.com in June, the Chinese company quietly began selling products on Google’s shopping site Google Express this year. There are currently more than 1,000 products listed on Google Express from Joybuy, a JD.com-owned English shopping website for overseas customers. Among the items listed are electronics and hair extensions, which can be delivered within four days. A JD.com spokesperson confirmed that products were listed on Google Express this year, and said it is still in a testing phase.
JD.com has pledged to offer a more seamless experience for U.S. customers through the Google partnership. In China, JD.com is known for its ultra-fast delivery and extensive supply chain.
“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,” the JD.com spokesperson told Yahoo Finance.
It remains to be seen how China’s e-commerce giants’s efforts in the U.S. will pan out. Amazon, an e-commerce giant in the U.S., hasn’t had much luck in China and is reportedly considering selling its China business to domestic player NetEase. In 2019, China is expected to account for nearly 56% of all online retail sales globally, while the U.S. market is projected to contribute 17%, according to an eMarketer report.