China's Alibaba.com Creates Channel for Small U.S. Retailers to Discover New Products

Alibaba.com, the Chinese-based commerce platform perhaps better known for being partially owned by Yahoo, is launching a new wholesale division aimed at small American retailers.

In China, the company is more recognized for its gigantic consumer-facing e-commerce site, Taobao.com, but internationally it’s more known as providing a marketplace to connect Chinese suppliers with retailers at the wholesale level.

Today, the company is expanding those wholesale services to include the Premier Channel on AliExpress.com, which aims to introduce up-and-coming Chinese brands–which are producing apparel, electronics, jewelry and items in other similar categories–to small-to-medium-sized retailers in the U.S. that are looking to differentiate. At launch, the company is showcasing more than 30 brands such as AKseries, DeereMarchi, Dilong, Etonian Kidd, Justmatch, Mbox, rip, and VANCL.

“We think that smaller retailers are especially in need of a differentiator and need unique products that they can make a margin on. Margins erode so quickly when tons of sellers sell the same thing,” said Annie Xu, general manager of Alibaba.com and AliExpress in the U.S.

For the Chinese manufacturers that have often done well on Taobao.com, it gives them the opportunity to expand internationally. “There are lot of innovative designers and innovators in China. We want to help the people, who have capability to design authentic original products, move up in the value chain. That’s the thinking behind it.”

She said China’s often known for following trends, but increasingly, she said there are examples of more original work being done. “We want to transform ‘Made in China’ to ‘Designed in China,'” she said. “We can help with smaller emerging brands and designers, who don’t have the research and knowledge base to acquire customers.”

Xu said Alibaba has a number of strict policies in place in order to help retailers gain trust in the system. Manufacturers will have to provide 24-hour customer service and promise to ship items within 24 hours. There’s also free shipping on all returns. Additionally, manufacturers will have to put up a deposit with Alibaba in case there are any disputes and a customer demands a refund.

Those steps may be necessary to establish trust: the top management of Alibaba.com resigned earlier this year when an internal company investigation determined that thousands of fraudulent sales were taking place.