Apr 25, 2018 - Economy

Alibaba is bypassing Amazon in China

In Ganyu, China: Busy on Alibaba Singles Day last November. Photo: VCG / Getty

Alibaba, the Chinese e-commerce gargantuan, says it isn't in a race with Amazon for U.S. customers, but that it is eager to take U.S. merchandise to its 550 million customers in China.

Why it matters: American politicians and technologists are unusually sensitive to what's often perceived as China horning in on American customers, markets and tech. But they may be missing a different game — using an elaborately built system, Alibaba is linking U.S. merchants directly to millions of Chinese customers, bypassing Amazon and other American platforms as an essential way-station to the Chinese market.

Brion Tingler, an Alibaba spokesman in the U.S., said the company was selling 7,000 U.S. brands in China as of last year, led by Apple, but wants more. "We have no designs on the U.S. consumer but we want to help U.S. companies sell to the Chinese consumer," Tingler tells Axios.

  • Alibaba's system, called Gateway, introduces U.S.-based merchants, big and small, to the Chinese market. Independent agents linked to Alibaba do the actual merchandising, payments and logistics — shipping sold goods to China.
  • In one selling method, U.S. merchants can be connected into livestream shows hosted on the Alibaba platform. Chinese viewers can click and buy the products immediately. "At the end of the show, you know how many items you've sold," Tingler said. The agent then takes care of shipping it directly to the customer for you, he said.
  • "We believe Chinese consumers want smaller niche brands," Tingler said.
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