Office Depot Inc. and Alibaba Group Holding Ltd.’s business-to-business unit formed a partnership to capitalize on opportunities selling to small- and medium-sized companies.
Through the partnership, Office Depot will direct business customers to Alibaba.com’s wholesale trade site, when they look for items beyond traditional office supplies.
Shares of Office Depot went up 6.7% in premarket trade the next day, while Alibaba’s stock improved 1.5% ahead of the opening.
John Caplan, Alibaba’s B2B head for North America, said that the Alibaba.com platform lets business owners search for verified manufacturers, negotiate prices with them as well as make payments.
Caplan added that instead of businesses trying to find high-quality manufacturing on their own, which is not easy and time-consuming, Alibaba is “making it easy for small businesses to source and reach the world.”
Business owners would have the option to use Office Depot’s distribution network to help get the items they bought through Alibaba.com to their customers, Caplan said. Office Depot can deliver the next day to 99% of U.S. businesses. Businesses are also entitled to discounts on Office Depot products if they reach a certain amount of purchases through Alibaba.com.
Chief Executive Gerry Smith said that Office Depot ‘s B2B sales now comprise 69% of revenue up from 49% about two years ago.
Smith told MarketWatch that the arrangement is “a catalyst for growth and a platform that makes small businesses successful, accelerating both of our strategies,”