Office Depot and Alibaba Group Holding together launched an e-commerce website in the United States, offering hundreds and thousands of US-based small and medium businesses an opportunity to go global. The partnership was announced on Monday, as a result of which both companies will capitalise on the opportunities to do business with small and medium businesses directly.
Office Depot is already reaping the benefits of this partnership as its shares shot up 10 percent to $3.9 in premarket trading on Monday. According to MarketWatch, this puts the shares of the company to open at the highest price seen during regular-session hours since October 2017. Alibaba shares were also up by 1.3 percent at $186.35 in premarket trading.
Office Depot and Alibaba partnership would give the Chinese e-commerce giant access to Florida-based office supplies provider's 10 million business customers and 1,800 sales agents. On the other hand, Office Depot will be able to gain access to Alibaba's global network of 150,000 suppliers and get a major boost in its struggle to compete against Amazon.com.
Together, both companies will be able to tap into a $23.9 trillion global B2B e-commerce market opportunity. This is also a boon for small and medium businesses in the U.S. that will be able to sell their products globally and search for verified manufacturers, negotiate deals and make payments seamlessly from a single platform.
Office Depot can provide next-day delivery to 99 percent of U.S. businesses and discounts will be provided on select purchases through Alibaba marketplace.
"Leveraging Office Depot's trusted brand, local presence, and national supply chain distribution network with Alibaba's global supplier network and well-known capabilities in serving SMBs, U.S. businesses can now access a wide array of products and services through Office Depot and Alibaba.com's collaboration, which will empower them to compete and thrive. Through this initial phase of work together with Alibaba.com, we intend to grow our collaboration in ways that will drive even greater value and choice for our current and future customers," Gerry Smith, CEO of Office Depot, said in a statement.