"Through its recent acquisitions, Alibaba.com is building the world's first global e-commerce supply chain."
You might read a similar sentence in any e-commerce company's press release, any day of the week. But when Alibaba.com announced its latest move to create a Chinese business-to-business empire, it wasn't just whistling Dixie.
Late last night, Alibaba.com -- successful scion of Hong Kong-listed Alibaba Group -- announced that it is buying e-commerce facilitator Auctiva. When a small business wants to sell merchandise on Amazon.com
In short, Alibaba's purchase of Auctiva is even more important as its purchase of Vendio was two months ago. Auctiva currently boasts more than 170,000 "active users" of its services; for Alibaba, this purchase captures a merchant audience twice as big as the Vendio deal did. Combined, Alibaba now controls the connection of a quarter-million American merchants to potential suppliers in China and elsewhere.
Who's it hurt?
In an announcement just 10 paragraphs long, Alibaba took time to fire a shot across the bow of companies that have, to date, counted many of these merchants as its own -- firms that hawk liquidated and overstocked merchandise to online merchants, wholesale, for resale to consumers, retail. Speaking through the voice of one Auctiva user, puppet-style, Alibaba opined: "I spend a lot of time online looking for products I can sell. I used to use liquidation sites, but AliExpress is much better, and more reliable."
If a line like that doesn't set the electronic-wholesalers at Overstock.com
Who's it help?
Apparently, it helps the online merchants (or at least that one conveniently quotable merchant), who believe that by sourcing their merchandise from a single clearinghouse, they'll be able to lower their costs and increase their sales volume.
UPS
The biggest winner of all
Where will Alibaba strike next? The company's promised to invest $100 million in expanding its B2B empire. While purchase prices for Vendio and Auctiva remain shrouded in mystery, CEO David Wei says he's still got "a lot of room" in his wallet before hitting that ceiling -- so your guess as to Alibaba's next bid is as good as mine.
Unfortunately for Alibaba, one prize still remains elusive. Since May, Alibaba's parent company has mused publicly about its desire to repurchase Yahoo!'s
Whatever Yahoo!'s asking price turns out to be, I'll guarantee you one thing: It'll take more than a piddling $100 million for Alibaba to consolidate its empire. When the price is finally named, Yahoo! will demand a king's ransom to free this Chinese prince.