Chinese auction site Alibaba.com has announced that it will buy Auctiva, a company that makes tools for small online businesses, as part of a plan to build what its CEO termed "a global supply chain" for small merchants.Alibaba has more than 53 million users, and the company is only looking to grow.
Currently, most of Auctiva's 170,000 customers sell their wares through eBay - a relationship that Alibaba wants to keep intact. However, the auction site hopes that the buyout will encourage some small businesses to begin partnering with Alibaba to gain access to a new customer base. In addition, the acquisition of Auctiva will help Alibaba build its brand name in the United States and other countries far from China.
The merger is good news for Auctiva, as well.
"With more than 10,000 new users joining Auctiva each month, we are constantly looking for new ways to serve our customers and drive value for them," said Auctiva CEO Jeff Schlicht. "Joining Alibaba.com and connecting our buyers to the vast supplier base on Alibaba.com and AliExpress.com is the perfect way to help them grow and thrive in an increasingly competitive environment."
While both companies declined to name the price of the sale, Alibaba has said that the acquisition is part of a $100-million plan to provide a bigger internet presence for small-sized merchants, particularly those selling discounted and close-out merchandise.
David Wei, Alibaba's CEO, said the company still recognizes the value of the middleman to small businesses.
"Wal-Mart can source directly from China," Wei said. "With us, small sellers can compete."
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