Alibaba will use their Alipay electronic payments system to handle Chinese sales, payments and even shipping for big U.S. retailers including Neiman Marcus, Macy's and Saks and Shoprunner, the online mall that allows for free two-day shipping for paying subscribers.
Additionally, Alibaba will prepare a massive marketing campaign to raise awareness about their global business-to-business wholesale platform, Alibaba.com.
Most Western and especially U.S. companies have struggled in China, and current U.S.-to-China, cross-border consumer sales are just $15 billion annually. Analyst estimates see that figure growing closer to $300 billion in the next half-decade. So far, very few companies have seen success in China, with the most notable being Apple.
"It's not a big thing right now, but within the next 12 to 18 months what you'll see more of is bringing 300 million Chinese consumers to retailers in the U.S.," Alibaba Vice Chairman Joseph Tsai said last year.
The new effort is important because it will not require retailers to have a physical presence in China and Alipay could mute the difficulties of foreign exchange. The new program would be called ePass, which includes a "customs pre-approval process, a sort of "fast lane" that shaves days off delivery." As anyone who has bought from China in the past knows, shipping times can vary widely.
How the process would work is pretty simple. If a consumer in China buys an item from Saks, Alipay would handle the financial side of the transaction and the item would go to a U.S-based Alipay facility that then takes care of the shipping to China. With pre-approved customs clearance, the item can ship quicker and an Alibaba local partner would take care of final delivery.
There are only a few retailers piloting the program, say the sources including the aforementioned Saks, NM, and Macy's and also luxury flash site Gilt, Ann Taylor and Aeropostale all of which confirmed the pilot but did not comment on its success as of yet.
Written by: Andre Yoskowitz @ 18 Jan 2015 13:20