Alibaba invests in new Amazon challenger | RetailDetail

Alibaba invests in new Amazon challenger

Alibaba invests in new Amazon challenger

Chinese ecommerce giant Alibaba has secretly invested in Jet.com, an ambitious online wholesaler that will soon start up in the US. At the same time, CEO Jack Ma feels his company "has grown too fast" and announces a vacancy stop.

Jet.com becomes online department store for subscribers

Jack Ma seems to have participated in American start-up Jet.com's recent fundraising. The company managed to raise 140 million dollars in February, thanks to several investors, but it is unclear how much Alibaba has invested in the company. The man behind Jet.com is Marc Lore, who previously sold Quidsi (Diapers.com's parent company) to... Amazon.

 

Jet.com places itself directly in Amazon's path, although it applies a totally different business model: "a marketplace for subscribers". It only wants to make money through the subscription fees (49.99 dollars per year) and will not bother with sales profit margins, proposing its subscribers prices which are 10 to 15 % lower than with "other online parties" (in order to avoid naming Amazon).

 

Jet.com is Alibaba's second front to compete with Amazon, alongside 11main.com, its own American online department store.

 

63 % more people in 1 year

Jack Ma has issued a complete recruitment stop at Alibaba: "Alibaba is expanding too quickly ...This year our entire group’s headcount won’t increase by one person. [...] we need to get into formation.” The company will still replace those who leave, but will not add staff.

 

The Chinese internet giant grew its staff 63 % in the past year, up to 34,081 people. According to Ma, Alibaba should be able to function perfectly with a "mere" 30,000 employees.

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