A sales assistant sits behind and under Alipay logos at a train station in Shanghai. ShopRunner hopes to increase its presence in China using its partnerships with Alibaba and Alipay. (Photo : Reuters)
ShopRunner, Inc., the self-styled “anti-Amazon” online retail startup backed by Alibaba Group, has more than doubled its users in the past year and is aiming to do so again in 2015, ShopRunner’s chief executive said to the press on Monday.
ShopRunner CEO Scott Thompson told Reuters in an interview that its cross-shoppers (members who started out buying from just one or two retailers evolve to catering to more shops) grew by nearly 60 percent in 2014, a huge increase from 20 percent the previous year, bringing the company's total membership to around 2.4 million.
Founded in 2010, ShopRunner offers services similar to that of Amazon, including a $79 two-day shipping to Amazon's $99 and express checkout, although Thompson states that the company aims to be more like an "online shopping mall" that puts emphasis on brands rather than on the lowest price.
The retailer also provides its partners, which include Cole Haan, Under Armour and Neiman Marcus, ownership of customer data and relationships.
"These businesses spend a lot of money to do the right thing with their brands," Thompson said. "I want the segment of customer who says I want to pay a fair price, but I want the experience to be predictable."
Over the long term, Thompson hopes to take greater advantage of its ties to Alibaba, who acquired a 39-percent stake of ShopRunner in 2013 for $202 million.
ShopRunner is one of several U.S. e-commerce companies tapped by Alibaba and its affiliate Alipay to help U.S. retailers break into China. Through Alipay's "e-Pass" service, which enables Chinese users to purchase goods from U.S. retailers, ShopRunner aims to help Neiman Marcus and its other partners sell to consumers in China by marketing their brands to buyers in the country.
As Alibaba's biggest single U.S. e-commerce investment, ShopRunner will play a key role in Alipay's effort, the Beijing-based Sina media portal said in a report on Monday.
Although he declined to provide details, Thompson said that ShopRunner's four-month effort to sell through Alipay is going well and showcases the vast potential of the Chinese market, which retailers like Best Buy have made minimal success despite years of effort.
There is evidence suggesting Alibaba's investments are starting to bear fruit. Online shopping website Gilt.com has reported a twofold increase in sales since it partnered with Alibaba and Alipay in Oct. 2014. iHerb, a startup specializing in vitamins and health supplements, has seen sales surge 693 percent in the first six months, Alipay America president Jingming Li said in a conference in San Francisco on Wednesday.
"This will be, over a three-year period, equally as big a business and equally as compelling," Thompson said. "The opportunity is just too big to miss getting this one right."
