Alibaba Stumbles In American e-Commerce Market

Alibaba is going to fold the operations of 11 Main into OpenSky. This deal can be of the same approach as that of Snapchat and Lyft if the project seems promising.

Latest Alibaba news surrounds the company selling a subsidiary. The ecommerce powerhouse from China is pretty sure about the ambitions it has in order to enhance its presence in U.S. One part it has decided to play is as the facilitator between the Chinese consumers and Western companies by the services it offers such as Alipay and the other part is as the way to expand the footprint of itself in the marketplace. Having said that, there are some growing pains that it is going through right now as the company is carving out the way in the U.S marketplace.

The Chinese e-commerce giant has called it day when it comes to operating 11 Main, the U.S based company which is the competitor for Amazon. There is a deal that has been struck by the company with OpenSky in which the operations of 11 Main shall be folded into OpenSky, along with Vendio, Auctiva and SingleFeed. OpenSky is the marketplace for social shopping whereas the three companies mentioned are the ones that Alibaba acquired back in 2010 and 2011 which have been dedicated to provide the fulfilment services and logistics for 11 Main.

Alibaba news reports that, “OpenSky and 11 Main will be joining forces, and we believe together the combined business will be a strong and healthy independent company in which Alibaba will continue to have a significant equity stake.” According to the company, the business that has been combines shall have inventory coming from 50,000 brands and also “millions” of shoppers. The company states that such joint ventures will enhance the sales across the globe and deliver in efficient way on the mission to make SMB brands more powerful and not only reach to but also sell to consumers in a better way.

There has yet not been any disclosed investment or number from the company in OpenSky. The approach from the Chinese giant is the same as for that with Snapchat and Lyft. It might invest in the company additionally down the road if this plan and the business is the promising one.

However, there is a less shiny side of this joint venture, large number of workforce will be given notice at 11 Main which is the part of this transaction. Many people who are at the management team of the company have left it already which also includes its VPs of product, marketing and merchandising and also the entire team for merchandising. However, the teams shall merge as the part of this deal. There is no clearance on the fact if there will be a separate functional site of 11 Main that might still exist. This deal shall be finalised in the end of next month.