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The COVID-19 crisis is prompting more businesses to buy and source products online as the pandemic casts a cloud over the traditional trade-show landscape, according to Alibaba Group Holding Ltd.
The company BABA, -0.18% has been seeing heightened usage and adoption of its Alibaba.com commercial platform, which allows businesses to connect with suppliers and buyers in an online marketplace setting. The number of transactions on the platform involving U.S. businesses grew more than 100% from a year earlier in April as the number of active buyers in the U.S. jumped 76%, Alibaba said Wednesday.
These growth trends mark an acceleration from pre-pandemic levels, according to John Caplan, Alibaba.com’s president for North America and Europe.
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“The big thing about COVID-19 is, everyone is home, working from home, and on the computer, so being digital is the only way to operate,” he told MarketWatch. “You can’t go on physical sales calls or get on a plane and go to a trade show.”
Alibaba.com has seen demand for personal protective equipment (PPE) on the platform grow seven times from January to April, with a more dramatic boost from March to April. Demand for products in the health and medical category grew between two and three times from January to April.
The company also saw wholesale demand climb for some “possibly less obvious” categories from February to March, including yoga wear, up 120%, casual shoes and educational toys, both up 49%, and outdoor furniture, up 37%. The U.S. is growing faster than the rest of the world on the Alibaba.com platform, Caplan said.
“People talk about small businesses as being on Main Street, but it’s also true for wholesalers that are two miles away from Main Street and employing 25 people,” he said. “What we’re seeing is small businesses using the platform to source and also to sell to businesses around the world.”
Alibaba began allowing U.S. companies to sell through Alibaba.com last summer after previously using the platform mainly as a way to connect Chinese suppliers with buyers across the world. The company cites U.S. government statistics that say the global business-to-business (B2B) e-commerce market could be six times larger than the worldwide business-to-consumer market, at $23.9 trillion.
The company is due to report March-quarter earnings Friday morning. Alibaba shares have fallen 1.5% over the past three months, as the KraneShares CSI China Internet ETF KWEB, -0.54% has added 0.8% and as the S&P 500 SPX, +1.66% has lost 12%.
