Alibaba And Office Depot Establish Partnership To Tap Small And Medium Businesses

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Today, Office Depot formed a partnership with Alibaba Group Holdings Ltd. The partnership aims to launch a co-branded e-commerce website that is seeking to tap into the opportunities of selling to small and medium businesses in the United States of America.

While the Chinese e-commerce giant has entered in deals with various U.S. firms including Kroger Co to sell products in China through Tmall.com, its online marketplace, the deal with Office Depot marks the first business-to-business collaboration of Alibaba.com with a major firm from the United States.

The new partnership would give Alibaba access to the 10 million customers and 1,800 sales agents of Office Depot.

In a joint statement, the companies said that Alibaba would also have the ability to take advantage of the distribution network of Office Depot that offers next day delivery in the United States.

The customers of Office Depot will also get access to the global network of Alibaba of more than 150,000 suppliers to search for more product options or the best manufacturer to produce their goods.

As an example, in an interview with Reuters, the head of North America B2B at Alibaba Group, John Caplan, said that a cutlery maker that have a special design can look for a factory to produce it. The product can then be sold to restaurants or retailers around the world using the platform of Alibaba.com.

The deal is aimed at shortening delivery time, besides giving small and medium businesses in the United States some opportunities to sell beyond the United States through Alibaba.com.

In an interview with Reuters, Gerry Smith, the Chief Executive Officer of Office Depot, stated: “This is a great catalyst for growth for small and medium businesses in the United States. We believe it is going to save them time, it is going to save them money.”

The partnership comes as Office Depot experiences some difficulties to boost its sales amid the relentless competition fromAmazon.com Inc, an e-commerce giant. It is now concentrating on selling business services to their customers, instead of relying on its traditional business of selling office supplies.

The business-to-business sales of Office Depot have risen to become its largest revenue generator in 2018, while its retail sales have dropped in the past two years.

The shares of Office Depot were up by approximately 1 percent, while the shares of Alibaba increased by 1.4 percent.