Alibaba.com Tests Group Buying for Businesses

Earlier this year, B2B e-commerce website Alibaba.com quietly launched a new service called Bargain Buys to test the market potential of group buying aimed at small businesses instead of consumers. The service is pretty straightforward: Alibaba.com negotiates with its China-based Gold Suppliers—manufacturers and distributors who pay membership fees to sell on the platform—for special discounts on a wide variety of merchandise, then makes those discounted goods available to Alibaba.com buyers.

Besides saving small businesses the hassle of haggling for lower prices, Bargain Buys also allows small-lot purchases, thus helping SMEs better manage their inventory and minimize overhead.  Products are updated on an as-available basis and length of each promotion is determined individually with each supplier.

The service is available to Alibaba.com buyers worldwide. Some participating suppliers are accepting payment through Alibaba.com's escrow service, which provides additional safety to buyers when dealing with overseas vendors.

Paced by the growth of websites like Groupon, group buying has become an important segment of consumer e-commerce, last year generating an estimate $2.7 billion in sales in the U.S. and $2.5 billion in China. Will it catch on with SMEs?  Alibaba.com reports that the demand for Bargain Buys has been strong from both buyers and suppliers and the company plans to continue to develop the service. Check out Alibaba.com's Bargain Buys page here.