Tuesday, June 29, 2010

Alibaba Buys Vendio

The Wall Street Journal reports: Chinese Web giant Alibaba.com agreed to acquire e-commerce services provider Vendio Services Inc., marking the company's first U.S. acquisition.

The acquisition of Vendio, which helps merchants sell their goods on sites such as Amazon.com and eBay is part of Alibaba's larger push to penetrate the U.S. Terms weren't disclosed. David Wei, chief executive of Alibaba.com, said he is looking for similar opportunities to expand the company's "B2B2C," or business-to-business-to-commerce, model in the U.S, but added that while Alibaba runs Taobao, China's largest Internet retail platform, the company has no plans to expand into the U.S. online retail market.

Accoring to Alibaba., the deal will give the company access to more than 80,000 small U.S. businesses, most of which have not previously used online supplier services to source products and materials.

Enewsletter practical ecommerce adds these insights:

PEC: Why did Alibaba purchase Vendio?

David Wei, CEO, Alibaba: “Vendio supports over 80,000 small and medium online retailers in the States, and the U.S. from day one has been a very important market to Alibaba.com. Those 80,000 retailers are generating over $2 billion U.S. worth of GMB every year, but most of them have a sourcing issue to be solved, and we believe there will be great synergy for us to provide unique and exclusive offers to Vendio-supported merchants, and then Vendio merchants can continue to offer the value back to U.S. consumers. So, it's a win-win-win—U.S. consumer win, U.S. merchants supported by Vendio win, and our factories based in Asia will have a direct access to the US markets.”

PEC: Why Vendio, as opposed to another platform?

Wei: “Vendio is one of very few that offer a multi-channel solution for retailers, which we believe is the future for small online retailers; not relying on just one platform, but diversifying their channels to as many areas as possible. And, of course, we like Vendio's management team, which has been there since day one. Its technology also impressed us a lot. Vendio is the right size to kick off our $100 million U.S. investment for AliExpress.com.”

The term "multi-channel" in Wei's answer above refers to being able to support both B2B (supply chain) and B2C transactions, as well as its links to eCommerce Marketplaces like Amazon and eBay.

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