Alibaba has made it clear how it wants to enter the U.S., and it’s not doing it by going head-to-head with Amazon. That’s even more the case following today’s news that it is giving up on 11 Main, an online retail site it launched a year ago that was focused on selling a wide variety of items, including home, fashion, jewelry and crafts.
Alibaba said it is selling the site to OpenSky, a social shopping marketplace based out of New York. As a result of the transaction, Alibaba will also be handing over three other companies it acquired — Auctiva, Vendio and SingleFeed — and will have a 37 percent stake in OpenSky, TechCrunch reports.
The deal comes at a time when the Chinese e-commerce powerhouse says it will grow more conservatively and instituted a hiring freeze. It also has talked up its U.S. strategy, with Alibaba’s Founder and executive chairman Jack Ma coming to the U.S. just two weeks ago to deliver the message in person.
He said instead of launching a U.S.-based e-commerce site, he believes the much bigger opportunity is in helping American companies sell their products to a growing Chinese middle class. Alibaba has already helped a number of U.S. retailers enter the market, including Costco and Blue Nile. But perhaps Amazon is the biggest and most surprising example. In March, the two companies announced the Seattle retailer would sell more than 1,000 imports, including footwear, food, beverages, kitchen products and toys on Alibaba’s Tmall marketplace, and its sister site Taobao, which together reach 334 million active buyers.
OpenSky, which first launched in 2009, has raised nearly $50 million in funding and is part-Pinterest, part-Amazon. It operates a marketplace, in which third-party retailers can sell their merchandise, but it’s also presented in a social format that encourages community. The company was founded by John Caplan, who was previously the CEO of Ford Models, a modeling agency, and CMO of About.com.
Apart from OpenSky, Alibaba has a number of U.S. investments, including Snapchat, Seattle-based Zulily, Jet.com and ride-hailing service Lyft.
