China’s E-Commerce Giant Alibaba Launching Online Bazaar for U.S.
Nicknamed “China’s Google” by the tech industry, Alibaba has set its sights on America, with plans to open an online marketplace for the U.S. market. The site, 11Main.com, aims to provide an online shopping experienced inspired by Main Streets, historically the retail hubs of American cities. Rather than an amalgam of products ranging from the questionably cheap to high-end brands like Amazon, 11 Main focuses on “specialty shops and boutiques” in categories including “Fashion & Style, Home & Outdoor, Jewelry & Watches, Baby & Kids, Collecting & Art, and Crafts, Hobbies & Toys”, according to the site’s About Us blurb. Will the e-marketplace be a success?
Champions Of Small Business
Alibaba started as a small company connecting small local retailers with customers and has maintained this spirit, stating “The Alibaba culture is about championing small business” on the company’s website. The firm now operates with large and wholesale retailers as well, but it’s emphasis on supporting small business may play well with American consumers as business owners who have seen small business struggle over the past decade.
Somehow, Alibaba has found a way to make supporting small businesses profitable, especially ecommerce store business owners selling products on Squarespace or Shopify. The 11 Main parent company is astoundingly successful in motherland China, currently making up a massive four-fifths of the country’s total e-commerce business. The Economist reported in May that if measured by the value of goods sold through the company, Alibaba is greater than Amazon and eBay combined. This is surprising for Amazon in particular, which has appeared insatiable in its expansion, to the point where the success of brick and mortar stores seemed threatened. This may make 11 Main more appealing to consumers frustrated with Amazon’s perceived monopoly over mom-and-pop merchants.
Exclusivity’s Benefits — And Its Risks
Alibaba is certainly trying to cultivate a sense of exclusivity for 11 Main as a means of generating hype. Stores selling their products through 11 Main will be “hand-picked” and access to the online retail center will, at least initially, be invite-only. The site is generating some buzz in the tech world, but what about potential customers? For excellent examples of how the invite-only approach can go both wonderfully right and horribly wrong, we can turn to one company that’s had it both ways: Google. Google launched Gmail in 2004 as invite-only; it is now the world’s most popular email service. But in 2011, the very same tactic that successfully generated hype backfired, spectacularly. We all remember when Google announced Google+ and launched it as invite-only, basked in initial hype…then quickly lost public interest.
Initially, the invite-only status and Google’s strategic invite openings throughout the site’s launch created hype like it did for Gmail, but it wasn’t able to draw enough people over from Facebook to hold clout. Google+ eventually bounced back from total extinction and holds the second highest amount of accounts for social media sites after Facebook — but the success of a social network site is based on user activity, not number of accounts created. Google has since changed the purpose and direction of Google+, now more useful as an SEO (Search Engine Optimisation) tool than anything else.
The Google+ fiasco showed that money can’t necessarily buy success. Despite Alibaba’s enormous wealth and power overseas, 11 Main has no greater guarantee of catching on.
What The Future Holds
When the current U.S. e-commerce big-shots offer accounts to anyone — and the U.S.’s middle class is shrinking, not growing — the exclusivity approach could be a mistake for 11 Main. Because of the speed of growth and change online, it’s possible that what worked for in 2004 no longer works in 2014. The premise is appealing, but whether American consumers will give up Amazon or eBay is yet to be seen. We will have to wait and see if Alibaba’s marketing strategy for 11 Main will push it past the clutter and into the limelight.