Amazon Rivalry Proves Expensive For Alibaba: Report

Alibaba Group Holding Limited's BABA rivalry with Amazon.com Inc AMZN cost Alibaba its global expansion plans, the Financial Times reports.

After fetching U.S. businesses onto its e-commerce platform, Alibaba struggled to accomplish its targets.

Alibaba launched its business-to-business e-commerce website in the U.S. three years ago, aiming to sign up over 1 million local businesses and compete globally as its domestic operations succumbed to the domestic tech crackdown, economic slowdown, and growing competition.

Also Read: Amazon Goes The Alibaba Way To Drive Sales Growth

During its 2019 launch into the U.S., Alibaba saw the B2B e-commerce market representing a $23.9 trillion opportunity, six times larger than the global B2C e-commerce market.

However, Alibaba.com's failure forced Alibaba to readjust its growth plans. Additionally, the project saw at least 35 staff departures as the platform underperformed over complaints of bullying from management and long working hours. 

Alibaba did not replace the roles to ensure a quiet retreat from the market.

Alibaba.com has struggled to retain U.S. sellers since its launch, partly over a price war with the global merchants.

The majority of U.S. sellers canceled their subscriptions after a year. 

Alibaba.com slashed its target of signing up 1 million U.S. small businesses to just 2,000 yearly. 

In the last financial year, international commerce wholesale, including Alibaba.com, raked around 2% of the group's total revenue.

In 2018, Alibaba had snapped up U.S. software firm Opensky to expand in North America. Alibaba redeployed co-founder John Caplan and some Opensky staff to launch Alibaba.com in the U.S. 

Caplan departed in May to become co-CEO of Payoneer. At the same time, most former Opensky employees quit, unhappy with the takeover.

After a one-year run, Alibaba also braces to shut Tmall in Hong Kong on October 30. It looks to continue to provide payment and delivery services to residents in Hong Kong via its Taobao Marketplace.

Price Action: BABA shares traded higher by 4.89% at $106 in the premarket on the last check Tuesday.

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