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China's eBay buying up a global supply chain

26 Aug 2010

Source:  Forbes

Alibaba.com, a China-based e-commerce company with over 53 million users, is buying Auctiva, which makes tools for small businesses selling on the Internet, as part of a plan to build what its chief executive termed “a global supply chain” for small merchants.

Most of Auctiva’s 170,000 customers are on eBay, and while that relationship will continue, Alibaba wants to use this and other acquisitions to build its business with small merchants in the U.S. and elsewhere.

Alibaba has over 1.5 million sellers, mostly Chinese manufacturers, of which over 120,000 are top-rated larger companies. Many of these companies have excess supplies of goods they need to sell, Wei said, and small sellers can be effective in moving that merchandise, if they get the right terms.

Auctiva founder Jeff Schlicht said the company would continue to act as a third-party developer for eBay. The company, he said, is currently adding about 10,000 customers a month, most of whom gross between $2000 and $10,000 in monthly sales. Alibaba is likely to also build up Auctiva’s marketing, in an effort to add to that base of sellers, he said.

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