By XU Shiqi
E-commerce giant Alibaba Group is planning to expand its B2B wholesales platform 1688 overseas. One of the earliest offspring of Alibaba, 1688 was primarily focused on B2B for domestic wholesalers and parts suppliers.
President YU Yong visited Southeast Asia this year and found 1688 already well-known there. The group is in collaboration with the largest local procurement agents in Vietnam and will soon go truly global.
"Many offline traditional wholesalers in Vietnam and Thailand are familiar with 1688. But languages, currencies and logistics were chaotic. There was almost no after-sales fulfillment."
There are 6 million cross-border buyers on the 1688 platform, that’s up by 76 percent this year. More than 130 million items, worth close to 200 billion yuan, changed hands and countries.
Cross-border transactions accounted for about a quarter of 1688’s GMV of 800 billion yuan (US$110 billion) last year. It’s not much compared to Alibaba's total GMV of 83 trillion yuan, but by all accounts, growth may be about to take off in a big way.
Platforms like Temu and Shein do something similar for completely different commodities, treating sellers as suppliers and acting as super buyers. In this model, sellers lack pricing power and it’s anonymous, so orders seldom translate into actual customers.
1688's cross-border business provides software to cross-border merchants that manage transactions with big buyers or procurement agents purchasing Chinese goods to distribute locally. 1688 farms out translation, foreign exchange and logistics to local collaborators. An AI catalog enables processes like price comparison.
Despite 1688's accumulation of supplier resources over the years, the platform lags behind its peers. As a point of comparison, China Manufacturing Network, another cross-border B2B enterprise, reports 20 million buyers, while 1688's are only six million.
