San Mateo, CA—Alibaba may boast itself as the largest online and mobile commerce company in the world in terms of gross merchandise volume, accounting for about 80% of China’s online shopping market.
While the e-commerce giant continues to make inroads with new deals in its home market, Alibaba hasn’t duplicated that success in the United States, where it faces such powerhouses as Amazon, eBay and Etsy. Case in point, its 11 Main, an invitation-only marketplace opened in June 2014. The company claimed to have a “robust marketing plan” to support growth for shops featured on the site. Some U.S. merchants who opened their stores on 11 Main said they were counting on “Alibaba’s deep pockets to make the marketplace successful.”
Instead, 11 Main stumbled along, unable to gain attention and support from Alibaba headquarters in China, according to a person familiar with the matter who told the Wall Street Journal.
Today, Alibaba said it is selling 11 Main to OpenSky, an online-marketplace operator based in New York. In exchange, Alibaba is taking a 37.6% stake in OpenSky. (In another deal announced today, Alibaba and its financial-services affiliate, Ant Financial Services Group, are together investing nearly $1 billion into an Alibaba food-delivery booking service in China called Koubei.)
While 11 Main’s management will be integrated into OpenSky, 11 Main’s website will remain separate from OpenSky for now, Alibaba said. The internet giant offer few disclosing financial details.
In the past, Alibaba senior executives have said the company’s international strategy would focus primarily on helping overseas merchants and brands sell their goods to Chinese consumers, rather than expanding e-commerce services that compete head-on with established sites such as Amazon in Western markets.