On Tuesday, Alibaba said it is selling 11 Main, an online marketplace, to OpenSky, an online-marketplace operator based in New York. In exchange, Alibaba is taking a 37.6% stake in OpenSky. In another deal announced Tuesday, Alibaba and its financial-services affiliate, Ant Financial Services Group, are together investing nearly $1 billion in an Alibaba food-delivery booking service in China called Koubei, hoping to turn it into a local services platform to challenge similar apps backed by rival Tencent Holdings Ltd.
The two deals highlight Alibaba’s priorities as earnings slow down and competition intensifies at home. For the time being, analysts and investors are paying more attention to Alibaba’s efforts to solidify its strong position in the Chinese market. Alibaba holds roughly 80% of China’s online shopping market.
When California-based 11 Main first made its marketplace available on an invitation-only basis, the company said it had a “robust marketing plan” to support growth for shops featured on the site.
But 11 Main struggled to gain attention and support from Alibaba headquarters in China, according to a person familiar with the matter.
While 11 Main’s management will be integrated into OpenSky, 11 Main’s website will remain separate from OpenSky for now, Alibaba said.
Alibaba senior executives have said in the past that the company’s international strategy would focus primarily on helping overseas merchants and brands sell their goods to Chinese consumers, rather than expanding electronic-commerce services that compete head-on with the likes of Amazon in Western markets.
“The key issue is whether we are going to have something in the U.S. market that will really target U.S. consumers. We think in the long run that’s an interesting market to us. But today, our focus is very much on cross-border activities” that connect U.S. sellers with Chinese consumers, Alibaba Executive Vice Chairman Joseph Tsai said in a interview.