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Alibaba Sells Its US Online Marketplace to Focus on China

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Alibaba plans to sell US online marketplace 11 Main

Last year, when Alibaba (BABA) came out with its initial public offering on the New York Stock Exchange, the company noted that it planned to promote its US online marketplace 11 Main to compete with online giants Amazon (AMZN) and eBay (EBAY) in the US e-commerce market.

In addition to becoming the largest e-commerce player in China, Alibaba had plans to leverage the fast-growing US e-commerce market. According to a report from eMarketer and as the chart below shows, the US eCommerce market should continue to grow at a healthy double-digit growth rate.

However, things didn’t work out as planned and within one year of the launch of 11 Main, the company has now decided to sell it. According to a report from the Wall Street Journal, Alibaba is selling 11 Main to OpenSky. In return, it will take a ~38% stake in the company.

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Alibaba increases its investments in international markets

The main reason of selling this business is that the company now wants to focus its efforts on China, and its international strategy will continue to focus on selling products from foreign brands on its online platform Tmall. For more on Tmall, read A must-know overview of Alibaba’s main business lines.

Alibaba has also initiated its entry into the global markets with investments in AliExpress, a global retail marketplace selling Chinese goods to consumers worldwide. These investments have opened business expansion opportunities for Alibaba in the US and Europe (EFA).

To get exposure to the US e-commerce market, Alibaba also took on more than a 9% stake in the US online retailer Zulily (ZU) a couple of months back. Even if it is selling 11 Main, it has made a number of investments in the international markets.

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