Recent US fears that ecommerce giant Alibaba would pose a risk to brick and mortar retailers were ultimately unfounded after all. Alibaba stated today that, after just over a year of operations, it is closing and selling off its US-focused marketplace 11Main, reports TechCrunch.
Alibaba was never quite clear to begin with what exactly it had intended to accomplish in backing the fledgling American startup. Nevertheless, Alibaba has decided it would be wiser to fold all investments related to 11Main into a new equity partner, OpenSky. As part of the deal, Alibaba will transfer ownership of 11Main, and its other related ecommerce assets Auctiva, Vindio and SingleFeed to Opensky in return for a 37 percent share of Opensky.
This gives Alibaba an American joint venture operating through Opensky, which might be more profitable than its struggling standalone estores.
Enter Opensky
Opensky brands itself as a social marketplace operating in a similar fashion to what we saw with 11Main. A quick browse through the site reveals a notable absence of big-name brands, and it appears that the website is mostly set up to assist lesser-known labels find an audience. This is an interesting move because it suggests perhaps that Alibaba wishes to replicate its initial emphasis on smaller businesses. This strategy spurred Taobao, its original flagship China-based store, to dizzying heights.
Opensky appears at least nominally to have made some dent in the market, The site has over 50,000 merchant stores, two million products listed, and five million members. Whether consolidating assets or shrinking capital losses, perhaps operating with some leverage in the US market is better than none.
(Sources: TechCrunch and Bloomberg)
Editing by Steven Millward & David Corbin
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