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Alibaba plans to promote US brands

News, 19 January 2015

BEIJING: In an initiative that could boost cross-border consumer sales, Alibaba, the Chinese ecommerce giant, is planning to make it easier for US brands to sell to China's growing middle class.

Two sources outlined the strategy to Reuters, explaining that the company is piloting its Alipay electronic payments system to attract Chinese consumers to the offerings of major US retailers.

These include luxury retailers Neiman Marcus Group and Saks. Both firms have confirmed trials are underway.

Also involved is Shoprunner, an online site for US retailers in which Alibaba owns a stake, and Borderfree Inc, the New York-based retail logistics provider.

Commenting on the initiative, Borderfree CEO Michael DeSimone, said: "They own the toll road into China. What really puts the jetpack on things when you deal with an Alipay is, they're on the ground and they know the Chinese consumer so well."

Alibaba wants US brands to reach China's growing middle class, estimated to number 250m people, via its Alibaba.com wholesale platform. The company is also planning a marketing campaign to promote itself to American businesses.

By doing so, the sources explained, Alibaba wants to raise awareness in the US about what the company does, gain goodwill, and lay the groundwork for long-term operations.

The development came as the latest official statistics revealed that total retail sales of consumer goods in China increased 12% last year to 27 trillion yuan.

Unveiled by vice minister of commerce Zhong Shan on Friday, the data showed total consumption accounted for 48.5% of GDP growth in the first three quarters of 2014.

With consumption becoming more personalised and diversified, that will present huge opportunities for domestic and foreign investors, Zhong told reporters.

Data sourced from Reuters, China Daily; additional content by Warc staff