Office Depot and Alibaba.com Monday announced a strategic collaboration that is intended to change how U.S. small businesses operate, the companies said, helping them tap into a global B2B commerce market that the U.S. International Trade Commission says is worth $23.9 trillion.
In the initial stage of the collaboration, the two companies are offering a co-branded, online B2B destination that makes it easier for U.S. businesses to access “one of the world’s largest catalogs of goods and manufacturing capabilities,” the companies said, in addition to offering exclusive discounts to some of the most-essential products and services for small- and medium-sized businesses (SMBs). Office Depot and Alibaba.com said they intended to expand their offerings for SMBs to include logistics and sales channels in the near future as well.
WATCH: Office Depot, Alibaba.com Executives Discuss New Collaboration
“Leveraging Office Depot’s trusted brand, local presence, and national 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,” Office Depot CEO Gerry Smith said.
The tie-in brings together Office Depot’s more than 10 million U.S. business customers, about an 1,800-person salesforce, a supply-chain network that can reach nearly 99% of U.S. businesses with next-day delivery and about 1,350 retail locations. Alibaba.com offers a global network of over 150,000 suppliers, a large catalog of product listings and manufacturing capabilities, as well as an online platform that offers end-to-end services that range from sourcing to logistics and payments to U.S. businesses.
To start, the collaboration will focus on three key areas:
- A new co-branded online destination, “Office Depot on Alibaba.com”: The new online destination (www.alibaba.com/officedepot), which went live with this announcement, will give U.S. SMBs access to Alibaba.com’s global supplier network and its broad selection of products, in addition to exclusive online and in-store offers for select Office Depot products and services.
- Sales and U.S.-based customer support: Office Depot will leverage its relationships with U.S. SMBs to promote the tie-in and the goods and services it is providing, while Alibaba.com’s U.S.-based team will support Office Depot’s customer-support staff in addition to helping U.S. business customers to engage with Alibaba.com’s global supplier base and value-added services.
- Driving SMB adoption: Both companies are making an investment in marketing to help U.S. SMBs understand and benefit from the collaboration, and to drive adoption of the platform and services. Office Depot is planning online advertising, offline marketing and in-store signage, while Alibaba.com is focusing full the attention of its annual March Expo on Alibaba.com promotional event to drive engagement by U.S. SMBs online and in Office Depot and OfficeMax stores.
After the initial launch, the companies intend to add cross-border and local logistics services that combine Alibaba.com’s global logistics capabilities with Office Depot’s national distribution and fulfillment capability, which can reach nearly 99% of US businesses with 24 hours. Office Depot’s supply-chain network includes a more than 1,000 private fleet trucks, 9 million square feet of distribution and fulfillment capacity, its about 1,350 retail locations and dozens of third-party logistics partners, they said. Eventually, they aim to help U.S. SMBs, including Office Depot’s business customers, sell their products to buyers in the U.S. and around the world through Alibaba.com.
“If you’re a business in Detroit, we can help you reach customers in Los Angeles or New York or Miami, reach customers in Mexico City or Toronto or, frankly, around the world because ours is a global platform with both global supply and global demand,” said John Caplan, head of North America B2B at Alibaba Group.
Caplan emphasized that U.S. SMBs need more ways to grow and compete in today’s economy, while taking advantage of the significant opportunity in B2B e-commerce.
“We can accelerate the ability of a small business to in fact operate like a multinational company. That’s very powerful,” he said.
“With collaborations like this one, we will be able to offer SMBs more choice, greater access, and further opportunities to grow,” Caplan said. “We’ll accomplish this by leveraging Office Depot’s local relationships, capabilities and expertise alongside Alibaba’s global platform, technologies, and proven marketplace model. Businesses no longer need to choose between local and global, or online vs. offline—it’s all part of one experience.”
When asked about the future and implications for their respective industries, Caplan said, “Our mission is to make it easier to do business anywhere. We want to be an ally to all businesses, from SMBs to traditional wholesalers that serve SMBs. We believe our collaboration with Office Depot has great potential to be a catalyst for their growth and a competitive edge in the market, through digital transformation and fully leveraging the impressive assets they have assembled. This effort has the potential to create a new model for the entire industry. It’s time to start building bridges, not moats.”