PAYMENT TERMS, SHIPPING AND ONLINE TRADE SHOWS ON ALIBABA.COM: THREE NEW WAYS U.S. BUSINESSES ARE ACCELERATING DIGITALIZATION AMID PANDEMIC
As American small and medium-sized businesses (SMBs) fight through the challenges of COVID-19, Alibaba.com, one of the world’s largest B2B ecommerce marketplaces and a business unit of Alibaba Group, today unveiled three new products and services to help these businesses advance their efforts to digitize and pivot online. The products and services include Alibaba.com Freight to enable American SMBs to secure ocean and air shipping for their orders, Alibaba.com Payment Terms to provide cash flow control and Alibaba.com Online Trade Shows USA to connect U.S. manufacturers and wholesalers with business buyers in an engaging and live online format.
“Doing business online is the bridge for American small businesses through this crisis and into the next decade,” said John Caplan, President of North America and Europe of Alibaba.com. “We are accelerating our transformation to get both sellers and buyers quickly set up for success and provide the critical tools and services that are required for growth – access to supply and demand, shipping and logistics, and working capital. Ultimately, our goal is to give SMBs even greater access to the $23.9 trillion global B2B ecommerce opportunity – which is six times the size of the B2C ecommerce market.”
ALIBABA.COM PAYMENT TERMS – A POWERFUL DIGITIZED TRADE FINANCE SOLUTION
Maintaining cash flow and ensuring cash on hand have become even more critical for SMBs during the pandemic. Alibaba.com Payment Terms is the first-ever trade financing solution embedded directly into a cross-border B2B ecommerce marketplace, allowing qualified buyers to order goods and pay for them up to 60 days after they are shipped. Before today, the vast majority of cross-border trade between small businesses required full payment upfront. Small businesses could not benefit from the global supply chain financing programs that their larger competitors frequently enjoyed. Alibaba.com Payment Terms1, offered in collaboration with MSTS, addresses this problem and gives qualified SMBs an additional way to stay competitive by helping to alleviate cash flow pressures.
“We typically pay our suppliers upfront, which ties our cash up in inventory costs and keeps us from planning very far ahead and investing in our business,” said Necia Boston, founder of Greenville, N.C.-based B.A.A.B.S. Beauty, a makeup and beauty products retailer and early applicant of Payment Terms. “With Alibaba.com Payment Terms, we’ll be able to keep our costs competitive with larger beauty brands, plan for our future product lines and stock up far in advance of the back to school and holiday seasons.”
Payment Terms joins Alibaba.com’s suite of financial solutions that provide business buyers the ability to preserve cash for longer while funding their inventory costs.
“While SMBs often have difficulty getting trade financing from banks, Alibaba.com’s Payment Terms provides the working capital they need to fuel their growth,” said Caplan. “This is possible for Alibaba.com because we know the buyers and sellers on our platform, and financing is offered for transactions that we know are real. This is a truly game-changing innovation that opens new opportunities for America’s small businesses. I can’t wait to see our customers benefit from it.”
ALIBABA.COM FREIGHT – A SHOCKINGLY SIMPLE BUILT-IN OCEAN AND AIR SHIPPING SOLUTION
With an average order size of $2,000, Alibaba.com shipments involve containers and pallets, not parcels and envelopes. The newly launched Alibaba.com Freight, powered by digital freight marketplace Freightos, helps SMBs simplify arranging their bulk shipments with the ability to instantly compare, book, manage and track ocean and air freight in real time online, effectively modernizing the analog, opaque and historically slow process for arranging cross-border logistics.
“Alibaba.com Freight’s extremely friendly user-interface takes what is usually a daunting and extremely complicated task, and turns it into a simple, concise step-by-step process without allowing you to make any mistakes before you move on to the next step,” said Casey Heim, founder and CEO of Hoxie, KS-based WAKE 10, a manufacturer and seller of equipment in the wakesurfing and boating industry and early user of Alibaba.com Freight. “Alibaba.com Freight has helped us continue to source from overseas and expand our product line even during this global crisis, and we are set to launch four new products for the summer.”
ALIBABA.COM ONLINE TRADE SHOWS USA – LIVE CURATED CONNECTIONS BETWEEN BUSINESS BUYERS AND SELLERS
According to Alibaba research, trade shows have historically been the most important way for sellers to meet and acquire new customers, and business buyers have benefited by using them to explore new products and suppliers. COVID-19 has drastically limited this critical channel for trade. In response, Alibaba.com is launching Online Trade Shows USA, a series of category-specific, livestreaming experiences designed to convene quality buyers and sellers to meet and transact in real-time over a pre-determined period of days. These events showcasing U.S.-based manufacturers and wholesalers are part of Alibaba.com’s global online trade show initiative2 of over 20 shows in the next 120 days to bring the world’s SMBs together over virtual show floors.
These innovative, digital-first events feature agendas full of insightful keynotes from industry leaders as well as top U.S. suppliers promoting their products to a select audience of verified business buyers. U.S.-based manufacturers and wholesalers are able to showcase their stories, capabilities and products as a way to promote their business, meet new prospects and drive sales during this transition to digital-first trade. Buyers who attend the events can interact and ask questions of the suppliers, schedule one-on-one sessions and place orders through the platform.
“With the disruption of COVID-19, the next era in global trade starts today, from home and online,” said Caplan. “The grit, resilience and needs of American small businesses who face extraordinary challenges right now have inspired and motivate us to re-imagine the trade show experience for our customers. Alibaba.com Online Trade Shows USA will showcase the innovative products and capabilities of U.S. small businesses and connect them to our rapidly expanding community of more than 10 million global buyers.”
The first live event exclusively designed to showcase American businesses will run from July 7-10, 2020 with the Supplements & Nutrition category. Alibaba.com is hosting the event in partnership with the USA CBD Expo, the nation’s largest CBD industry event, and the United Natural Products Alliance (UNPA). The event will feature daily sessions designed to facilitate meaningful connections between business buyers and U.S.-based manufacturers, wholesalers, raw ingredient suppliers and brands in the supplements, nutrition and CBD category who offer finished and customizable products. Sellers interested in being featured can apply online and buyers interested in joining the online event can register online. Additional U.S. shows will take place over the coming months for a variety of categories, including Food & Beverage, Agriculture, Beauty & Personal Care with more on the way.
ALIBABA.COM BUSINESS TRANSFORMATION
Alibaba.com – initially an online catalog of the world’s best manufacturers – was the original Alibaba business launched in 1999. It disrupted global trade by catapulting the global sourcing and supply chain industries into the Internet-era. Nearly two decades later, Alibaba.com began an earnest transformation on its journey to reinvent global trade, this time by disrupting itself and continuing the transition from a catalogue of suppliers to an end-to-end global trading platform with simple search and discovery, efficient communication and trusted payment, financing and logistics options. The platform opened to American sellers in July 2019, and the U.S. has since been the fastest growing market for new sellers and buyers. As a result of the transformation, gross merchandise value (GMV) on the platform has grown over 85% year over year and customers will transact tens of billions of dollars in GMV this year. At the same time, Alibaba.com’s annual revenue growth accelerated from the low single digits in 2017 to a 17% compound annual growth rate (CAGR)3.
With today’s announcement, Alibaba.com continues to transform amid the global pandemic while keeping at its core the mission to make it easy for businesses to do business anywhere.
1All the purchase program accounts as well as deferred payment and other accommodations under the Alibaba.com Payment Terms program are provided through MSTS. Alibaba.com is neither a lender nor a broker for the credit lines issued under the Alibaba.com Payment Terms program.
2About Alibaba.com Global Online Trade Shows: Alibaba.com launched its first global online trade show to support SMBs affected by the Coronavirus in May focused on Home and Health, which attracted more than 1 million business buyers over the course of two weeks. The next global Alibaba.com trade show will take place on June 6-26, 2020 and will feature suppliers and products from more than 40 categories.
3 Alibaba.com revenue figures approximated by “International Commerce Wholesale” segment financials reported in public filings.