Alibaba's Opening an Online Store With Office Depot, as the 2 Companies Work to Beat Out Amazon
Office Depot is teaming up with Chinese ecommerce giant Alibaba, as both companies hope to benefit from the other's strengths to win over American small-business owners.
On Monday, Office Depot and Alibaba.com announced a partnership aimed at American small- and medium-sized business, tapping into the business-to-business, or B2B, market in the U.S.
The two companies are launching a co-branded online store, as well as collaborating on revamped customer support, distribution and fulfillment options. American businesses will have access to a new sales channel to sell their products globally through Alibaba.com.
Office Depot and Alibaba hope to win over business owners with the convenience of a one stop shop, melding Alibaba's global B2B platform with Office Depot's American experience.
"I think there is not a clear, trusted, friendly source for small businesses today," Office Depot CEO Gerry Smith told Business Insider. "We're not going to go private brand people, we're not going to scrape customer data. We're going to provide a platform for them to be successful."
Ecommerce and B2B have becoming increasingly important to Office Depot's business since Smith took the reigns at the company in 2017. Since Smith took over, Office Depot's B2B business has grown to 61 percent of Office Depot's business, up from 49 percent. Smith said that he hopes to grow the figure in the years to come.
Meanwhile, Office Depot's 1,350 American stores offer a different advantage for Alibaba.
"Office Depot has an amazing brand that's trusted by small business here in the United States. ... Just about every business in the United States has a relationship with Office Depot," said John Caplan, Alibaba Group's head of North America B2B.
In China, Alibaba has been doubling down on the omnichannel experience, melding online and offline business with projects such as the tech-heavy grocery chain Hema. The Office Depot deal allows Alibaba access to brick-and-mortar locations, 20 years after the company launched Alibaba.com in the U.S.
Globally, the B2B ecommerce business is a $23.9 trillion proposition, according to the U.S. International Trade Commission. And, ecommerce giants such as Alibaba and Amazon have been eager to cash in.
Sales through Amazon Business, the company's B2B marketplace, hit $10 billion on an annualized basis, the company announced in 2018. By 2021, that figure should exceed $25 billion, according to Baird Equity Research.
At the same time, some companies that sell product through Amazon Marketplace have complained about Amazon acting as both a marketplace and a competitor and, at times, elevating its own products over third-party sellers.