Office Depot, Alibaba Partner for Online B-to-B Store
Office Depot is teaming up with Chinese e-commerce giant Alibaba, as both companies hope to benefit from the other's strengths to win over American small business owners. On Monday, Office Depot and Alibaba.com announced a partnership aimed at American small and midsized businesses, tapping into the B-to-B market in the U.S. The two companies are launching a co-branded online store, as well as collaborating on revamped customer support, distribution and fulfillment options. U.S. businesses will have access to a new sales channel to sell their products globally through Alibaba.com.
Total Retail's Take: Office Depot continues to take steps to grow its B-to-B business and move away from B-to-C. In the two years since CEO Gerry Smith joined Office Depot, the office supplies retailer has seen its B-to-B revenues grow to 61 percent of the company's total revenue, up from 49 percent when he started. Office Depot will benefit from Alibaba's global B-to-B platform, enabling the brand to extend its reach to new markets as it looks to ramp up acquisition efforts. In return, Alibaba will gain access to Office Depot's 1,300-plus U.S. brick-and-mortar stores, helping to complement its growing online presence in the country. Together, the joint e-commerce site figures to take market share from Amazon Business, the online retailer's B-to-B marketplace. It makes sense for Office Depot to make its bet on B-to-B e-commerce, a fast-growing retail category, and pull back from its once-struggling retail locations.
“As a trusted partner to millions of businesses, our customers tell us they want more choice in the market and need an expanded set of products and services to help their businesses grow," said Smith in a press release announcing the deal. "We believe our collaboration with Alibaba.com is exactly what they're asking for. Leveraging Office Depot’s trusted brand, local presence, and national supply chain distribution network with Alibaba’s global supplier network and well-known capabilities in serving SMBs, U.S. businesses can now access a wide array of products and services through Office Depot and Alibaba.com’s collaboration, which will empower them to compete and thrive."