Alibaba Starts Showing U.S. Businesses The Road To China
Zacks Investment Research | Jun 21, 2017 10:29PM ET
Alibaba Group Holding Limited (NYSE:BABA) has been blazing fast in attracting small businesses at its Gateway '17 confab in Detroit that ended on Jun 21. The announcement of Alibaba’s strategic partnership with Driscoll’s and Chicken of the Sea came straightway from the confab.
Per the deals, Driscoll’s will sell strawberries while Chicken of the Sea will sell seafood in China via Alibaba’s Tmall platform.
According to Jet Jing, Vice President of Alibaba Group, "These mutually beneficial partnerships will allow Alibaba to diversify the options available to consumers on our platforms, and we can help both Driscoll’s and Chicken of the Sea to successfully build their brand and presence in China."
The announcement sent the company’s shares up 3.6% to close at $142.34 on Wednesday.
Alibaba Seems Well Prepared
Alibaba has already developed partnerships and services to ensure that U.S. producers, wholesalers and associations export fresh and prepared foods to China effortlessly. The company’s logistics affiliate Cainiao Network facilitates same day and next day delivery in more than 1,100 counties and districts in China.
During the conference, the company pointed toward a win-win situation for U.S. merchants and Chinese consumers. Co-founder and vice chairman Joe Tsai stated that growing demand for high quality consumption allows American businesses to play a major role in China.
According to Produce Report, 36 million households in China made online purchase of fresh products in 2016 and that figure is expected to increase two times by 2020. It appears that Alibaba is set to pave the way for U.S. sellers to extend their reach in China.
Focus on U.S. Sellers
Alibaba’s increasing focus on U.S. sellers appears to be a strategic move to counter tough competition from established players such as Amazon (NASDAQ:AMZN) , eBay (NASDAQ:EBAY) and JD.com (NASDAQ:JD) in the U.S.
Alibaba Group Holding Limited Revenue (TTM)
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