Alibaba.com, China's top e-commerce operator, announced its second US acquisition on Tuesday night by buying Auctiva, a developer of software tools for eBay sellers. The deal will further expand the Chinese company's operations overseas by opening avenues for American small businesses to use Alibaba's e-commerce resources.
Auctiva already has more than 170,000 active users of its online sales, marketing and management tools for small businesses. But with this acquisition, those same sellers will now have a new line of access to sourcing their products from suppliers via Alibaba.com. "After doing some research we discovered that 90 percent of the people who sell their items online, they source them offline," said Alibaba spokeswoman Linda Kozlowski. "So we are connecting the factory to the small business," she said.
The deal is an expansion of Alibaba's business-to-business model, and aims to lower the cost to merchants by letting them source directly from the manufacturers.
Alibaba would not disclose how much it paid for Auctiva, but the acquisition is part of the company's $100 million investment plan to expand AliExpress.com, a website for smaller retailers to source products from suppliers. In June, Alibaba also purchased Vendio, another US e-commerce company that helps online merchants manage their sales.
Alibaba, however, also expects the deal to help rival eBay. "Hopefully what this does for eBay is increase their sales," Kozlowski said. "We want to help power their sellers. We want to help them source more so they can sell more."
More of these acquisitions by Alibaba can be expected, said Duncan Clark, chairman at Beijing-based technology consultancy BDA. "Alibaba is well capitalised and has big ambitions," he said.
As for what the deal might mean for eBay, "psychologically it must have an impact," Clark said. But he noted that the two companies have also cooperated in the past. AliExpress currently accepts payments using PayPal, which is owned by eBay. "It's coopetition," Clark said.