Alibaba Group Holding Ltd (BABA) Promotes U.S. Retailers with Alipay

Alibaba Group Holding Ltd (NYSE:BABA)

Alibaba Group Holding Ltd (NYSE:BABA), the Chinese internet giant retailer, is working towards promoting American businesses with Chinese consumers by using Alipay ePass, its own version of electronic payment system. The company will handle even shipping for large U.S. retailers including Macy’s, Neiman Marcus, Saks, and Shoprunner.

The current plan of Alibaba Group Holding Ltd (NYSE:BABA) to woe Chinese consumers in behalf of American businesses runs counter to perceptions of U.S. retailers regarding Alibaba’s intention concerning the U.S. market. In December last year, the Alliance for Main Street Fairness, a U.S. retailers group, specifically targeted Alibaba in an ad campaign arguing that tax loopholes in the U.S. puts the Chinese retailer in a position to decimate U.S. retailers. According to a source cited by Reuters, the company’s current plans of promoting American merchants to the growing Chinese middle class, which now account for a staggering 250 million consumers, by using Alipay ePass is also intended to promote goodwill within the western market. “Five years ago, e-commerce was in its infancy in China, but now it has exploded,” said Steven McCord, head of north China research at agent JLL, as quoted by the South China Morning Post.

Alibaba Group Holding Ltd (NYSE:BABA)At the heart of this effort, Alipay ePass will work to simplify the process of sales transactions between an American retailer and a Chinese consumer. Currently, logistical issues hampers the smooth processing of transaction between U.S. retailers and Chinese buyers. With Alibaba Group Holding Ltd (NYSE:BABA)’s Alipay ePass, however, everything will be simpler. Alipay ePass, the top payments facility for Chinese consumers, works with most international banks and financial service companies including Visa and Mastercard. Alipay would handle a purchase transaction from a Chinese consumer, convert the local currency to U.S. dollars and pay the merchant. It has facilities in the U.S. to handle shipping goods to Chinese customers. The arrangement enables U.S. sellers to tap China’s buyers without having to establish a physical presence in the area.

Seeing that Alibaba Group Holding Ltd (NYSE:BABA)’s move captures the potentials of internet retailing with Alipay, competitors were quick to follow suit. eBay Inc (NASDAQ:EBAY), for instance, announced that it will make its PayPal an independent, publicly traded unit by next year’s end. Google Inc (NASDAQ:GOOGL) is beefing up its Google Wallet service, while Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) have expressed interest in creating payment systems within their respective networks. Apple Inc. (NASDAQ:AAPL), on the other hand, launched the iPhone linked Apple Pay just last year.

This article has been written by Nonito Guntan.

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