Alibaba Group Holding Ltd. will introduce a service on its wholesale website 1688.com that allows merchants in China to source global brand names.
The service, which will begin on May 18, will initially offer brands from Spain, according to an e-mailed statement from the company on Wednesday. The website will add products from Portugal, Italy and South Korea in the future as the company seeks to build it into the largest sourcing platform for imports, Alibaba said.
Cross border e-commerce represents the next battle front for Chinese Internet companies including Alibaba and shopping sites backed by Tencent Holdings Ltd. As China eases policies and sets up test zones that make it cheaper and faster to import overseas goods, companies are rushing to introduce U.S. and European brands to tap demand from an expanding middle class that could reach 600 million in the next decade.
“As China’s middle class’s demand for high quality foreign brand names increases, it would help Alibaba ride the next wave of growth,” Liu Li-Gang, chief economist for Greater China at Australia & New Zealand Banking Group Ltd. in Hong Kong, said by phone. “China has just started opening up more free trade zones” making it easier to import goods, he said.
Created in 1999, 1688.com is a Chinese website that has been helping small merchants to purchase goods from within the country. Its counterpart Alibaba.com helps global wholesale buyers source from sellers in China, India and Pakistan.
The platform also plans to help importers by offering customs clearance, logistics support and product inspection services later this year, Alibaba said. Buyers and sellers are able to directly conduct transactions on the website.
Alibaba’s American depositary receipts declined 1.3 percent to $79.54 in New York on Tuesday.