US-based office supplies chain Office Depot has entered a strategic partnership with B2B trading platform Alibaba.com to compete with Amazon and win the favour of small and medium-sized American enterprises. The move was announced on Monday.
The two companies will launch a joint online store on Alibaba’s official website to support SMEs in their sales and marketing campaigns. After the cooperation is further expanded, the two parties plan to improve cross-border distribution and logistics, shorten delivery time and establish new sales channels.
The partnership will benefit both sides. E-commerce and B2B are increasingly important to Office Depot’s business. Since 2017 the new CEO Gerry Smith has paid great attention to the B2B business, helping it grow from 49% to 61%. Alibaba has also acquired new opportunities from this deal. Johan Caplan, head of Alibaba Group’s B2B business in North America, said the deal will them tap into the USD 23.9 trillion global B2B e-commerce market.
As for Amazon, the other giant in the market, its annual sales in the B2B market reached USD 10 billion in 2018, according to statistics from Baird Equity Research. The figure is expected to reach over USD 25 billion in 2021. Competition from Office Depot and Alibaba could be serious as many companies selling products on the Amazon platform also see it as a competitor.