Alibaba's "American Dream" shattered as the goal of one million B-end sellers was not achieved

It is learned that according to FT reports, Alibaba's global expansion plan will be shelved because it failed to achieve its goal of introducing 1 million local American companies to its B2B platform within three years.

Three years ago, Alibaba launched its B2B website Alibaba International Station in the United States, aiming to sign up more than 1 million local businesses within three years and compete globally with companies such as Amazon that have similar wholesale platforms.

But Alibaba’s U.S. business has failed to meet initial targets, forcing it to recalibrate its growth plans, according to three people familiar with the matter.

Alibaba’s B2B project in the U.S. has also been hit by dozens of employee departures. At least 35 Alibaba employees in New York, more than half of the team, have left in the past year over the platform’s poor performance and complaints of bullying by senior management and excessive working hours.

Alibaba’s stepped-up international expansion comes as its business-to-business unit in the U.S. suffers setbacks and its domestic business continues to be hurt by Beijing’s tech regulatory crackdown, a slowing economy and rising competition.

However, Alibaba International Station has had difficulty recruiting and retaining U.S. sellers since its launch, partly due to their lower pricing advantages.

“American manufacturers are not very competitive, and everything, including labor, costs much more,” one internal employee noted. “There’s not enough support within the team, so they can’t get enough suppliers and sellers.”

According to the employee, most U.S. sellers close their stores on Alibaba International Station after a year. Alibaba has now cut its goal of registering 1 million U.S. small businesses a year to 2,000, a person familiar with the matter said.

Alibaba International Station is the core pillar of its global expansion and the original business of the group. Although it only accounted for a small part of the group's overseas business when it entered the United States in 2019, it mainly focused on B2C sales. But Alibaba cited a US government report that the global B2B e-commerce business is worth 2.39 billion, six times the B2C e-commerce market, indicating its ambition to enter the B2B business.

Alibaba currently has more than 20 million active buyers from about 200 countries and 200,000 global sellers, but only a few thousand of them are U.S. companies. It charges sellers $3,000 a year to sell on the platform.

The international wholesale business, which includes Alibaba International Station, generated 18.4 billion yuan ($2.9 billion) in the fiscal year ended March, accounting for about 2% of Alibaba Group’s total revenue.

In 2018, Alibaba acquired US software company Opensky for an undisclosed amount to expand in North America. Co-founder John Kaplan and some Opensky employees were redeployed to launch Alibaba.com in the US.

Caplan left the company in May to become co-CEO of payment service Payoneer, while most former Opensky employees have now left the company, unhappy with the acquisition, people familiar with the team said.

Alibaba did not respond to a request for comment.

Editor✎ Ashley/

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