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Alibaba sells off US site a year after launch

A year after launching its U.S. e-commerce venture 11 Main, the Chinese e-commerce giant has sold off the business to New York-based online marketplace OpenSky.

Alibaba has sold off its year-old U.S. e-commerce venture to an online marketplace, OpenSky, in which it will own a 37.6 percent stake.

The move comes a year after the Chinese e-commerce giant launched 11 Main, then touted as an online shopping destination offering "interesting, quality products" from "hand-picked shop owners" across nine categories including technology and fashion. Selling on the e-commerce platform is based on "invite-only".

The deal will see Alibaba also selling off three other U.S. companies--Auctiva, Vendio, and SingleFeed--it had acquired for their logistics and fulfilment services, reported TechCrunch. Citing a company spokesperson, the report noted: "OpenSky and 11 Main will be joining forces, and we believe together the combined business will be a strong and healthy independent company in which Alibaba will continue to have a significant equity stake." It added that, together, the e-commerce site would offer an inventory from 50,000 brands and "millions" of shoppers.

The Wall Street Journal further quoted Alibaba to say the 11 Main website would operate separately for the time being, though, the U.S. site's management team would move to OpenSky. A couple of merchants on 11 Main told Bloomberg they quit the site after failing to move products, although one seemed grateful it helped put up a promotional video for her business.

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Alibaba faces challenges in US e-commerce bid

Chinese e-commerce giant will soon launch its first U.S. online shopping platform, 11 Main, and it's looking to stand out by offering "interesting products" from "hand-picked shop owners". But will it pick the right ones and succeed in driving traffic?

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The bulk of Alibaba's e-commerce revenue is generated from its Taobao and Tmall online marketplaces in China, which generated US$9.34 billion in sales on November 11, 2014, during the country's annual Singles Day shopping festival.

In this ZDNet blog on the launch of 11 Main last year, questions were raised about the viability of the U.S. e-commerce platform. Analysts pointed to potential challenges driving volume and traffic to the site with its merchant selection. They also suggested that the launch was timed to drive brand awareness in the lead up to Alibaba's IPO in September 2014.