Alibaba partners with Office Depot in first U.S. b-to-b foray
On Monday, big box retailer Office Depot announced a new partnership with Chinese e-commerce giant Alibaba, allowing small and medium businesses to sell beyond the U.S., and giving Alibaba a way to encroach on Amazon's business-to-business goals.
As part of the deal, Office Depot will direct business customers to a co-branded e-commerce site on Alibaba.com where they will be able to purchase items across categories, even outside of office supplies. Businesses will receive access to Alibaba's global network of over 150,000 suppliers which can help find more products or find other manufacturers. Office Depot shares grew by 11 percent Monday morning following the announcement.
The partnership helps Office Depot stay relevant among business as Amazon tiptoes further into Office Depot's domain with Amazon Business Prime which, last fall, added perks like same-day and one-day shipping of office supplies to U.S. businesses. Currently Office Depot offers next day delivery in the U.S.
As much as the deal is a boon to Office Depot, it's also a significant first step for Alibaba into the U.S. b-to-b market.
"So far, Amazon and Alibaba have mostly competed with each other away from their respective home turfs," said Alice Fournier, vp of e-commerce and digital at Kantar Consulting. "This now gives Alibaba an open door to the online b-to-b market, which is growing really quickly here in the U.S."
Alibaba has done deals with U.S. companies like Kroger, but typically those deals have been for U.S. companies to open stores on Alibaba's online marketplace Tmall, which allows businesses to sell into China. Through the deal, Alibaba receives access to Office Depot's 10 million customers and 1,800 sales agents. Alibaba will be using its annual March Expo to drive engagement with U.S. small businesses online, as well as with in-store discounts at Office Depot and OfficeMax stores.
The global b-to-b e-commerce market was recently valued at $23.9 trillion, according to the U.S. International Trade Commission. Small businesses account for 99.7 percent of all companies in the U.S., according to data from the Census Bureau's Annual Survey of Entrepreneurs.
"Alibaba's mission has been to make it easy to do business anywhere," said John Caplan, head of North America b-to-b at Alibaba Group in a statement. "With Office Depot, we will be able to offer SMBs more choice, greater access and further opportunities to grow."