Alibaba Goes Boutique: What We Can Learn from 11Main
ADOTAS — Last week Alibaba launched its first direct-to-consumer online shop in the United States at 11Main, a curated marketplace that will offer “one-of-a-kind items, not available at mass merchants and other large e-commerce sites.” Though most of us don’t have the resources of an Alibaba-sized parent company, we can use key insights from Alibaba’s newest venture to aid our own startup strategies.
Lesson 1: Set yourself apart. Having already developed and maintained Tmall and Taobao in China, Alibaba has no shortage of knowledge on building an online marketplace. The Alibaba team rightfully chose a formula they’re familiar with for 11Main. However, unlike Tmall, 11main looks to create a “main street boutique” specifically for online consumers. Alibaba’s decision to focus on quality, curated merchandise is a calculated move. Retailers like Amazon and eBay already dominate US eCommerce. With 11Main, Alibaba is not competing with its mass-market US counterparts, but taking on smaller competitors like Etsy while setting itself apart from the pack. In fact, 11Main’s slick design and focus on quality is already a topic of conversation among industry thought leaders.
Lesson 2: Seek expert help. Alibaba is a massive corporation. It has processed $5.75 billion in payments in a single day and been valued as high as $168 billion. What could this company possibly need to learn about eCommerce to succeed in the US? Actually, quite a bit. Over the last several years, Alibaba acquired three companies to gain the knowledge it needed to operate in a market that was foreign to them – Auctiva, Vendio, and SingleFeed. These acquisitions gave them insider knowledge of US marketplaces and relevant marketing strategy in the US. While I’m not suggesting we all go out and buy companies to grow our own, Alibaba’s humility offers a good reminder to consult experts before setting up shop.
Lesson 3: Make friends. At launch, 11Main looks to be conspicuously “merchant friendly.” 11Main merchants will have exclusive listings on the site, and it will be immediately apparent who is selling a particular product – a notable departure from Amazon’s current setup. More surprisingly, 11Main will only take a 3.5% commission (while Amazon takes 15% for non-media goods). This guarantees that merchants will flock to the site, allowing 11Main to offer the best merchandise while building its market share. At the same time, 11Main has already received applause for being small and business-friendly – reflecting a value that US consumers hold near and dear.
Alibaba is the undisputed global eCommerce king – but until now, it hasn’t had a presence in the US market. Though these are still early days for 11Main, Alibaba’s boutique, “Main Street” approach for its first US store appears well thought out – and already offers an interesting case study for small and mid-size eCommerce operators looking to compete with seemingly unstoppable mass-market giants.
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