The story goes that Alibaba founder Jack Ma chose his company’s name for two reasons: He wanted to be ahead of Amazon alphabetically and he wanted a global-sounding name. It didn’t hurt that some people also associated the word Alibaba with “hidden treasure” – recalling the most famous story from The Arabian Nights.
Alibaba is China’s giant ecommerce platform that is now taking on the globe. Its September 2014 initial public offering in the United States was the largest ever, and Ma has signaled his interest in expanding here.
Unlike Amazon, Alibaba doesn’t actually sell any goods; rather, it connects buyers and sellers. Its three main websites are Alibaba.com, which links Chinese exporters with companies around the world; Taobao.com, China’s biggest shopping site; and Tmall.com, a website of select branded goods targeted primarily to China’s middle class. Alibaba also offers a Paypal-like service called alipay.com.
Some experts predict Alibaba could soon be the largest retail platform in the world. With 330 million active buyers, it is the fastest-growing ecommerce company in the fastest growing market in the world.
So, what does all of this mean for the logistics and delivery markets? Well, a lot. Postal operators and private carriers are all trying to get in on Alibaba’s action. Last year, Alibaba bought a minority interest in Singapore Post and it signed an agreement with China Post to share facilities and resources to beef up delivery in China, especially in remote areas. Royal Mail recently announced it was joining Tmall.com to boost trade for its overseas parcels business.
And Amazon, not one to reject any opportunity to expand its reach, is also joining the party. It just opened a store on Tmall.com.
So, where might the U.S Postal Service fit in here? Do you see an opportunity for the Postal Service to partner with Alibaba? And what if Alibaba expands aggressively in the United States? How could the Postal Service position itself to be a player in that expansion?