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Alibaba Challenged in Conquering U.S. E-Commerce Market

| Jun 27, 2015 07:19 AM EDT

Details of the deal involving Alibaba, Hunan TV and DMG have already been released.

Leading Chinese e-commerce firm Alibaba has been challenged in conquering the U.S. online market. This was recently highlighted by its recent decision to sell 11Main, its U.S. e-commerce portal, to rival OpenSky.

The U.S. e-commerce market is currently dominated by heavy competitors like Amazon.com Inc. and eBay Inc.

The deal, which was announced on Tuesday, sells 11Main to the New York-based online-marketplace operator, in exchange of a 37.6-percent stake in OpenSky.

After about only a year of operations with Alibaba, 11Main struggled to gain attention and support from the e-commerce firm's main headquarters in China, a person familiar with the deal revealed.

In another agreement, Alibaba and its financial arm, Ant Financial Services Group, are investing about $1 billion in Koubei, an Alibaba food-delivery booking service.

These deals reflect Alibaba's priorities, as it has recently seen a slowdown in its earning and tougher competition in the local scene.

The Chinese e-commerce powerhouse went public in the U.S. in September, with an initial public offering of stock worth $25 billion.

According to analysts, though it might pursue more e-commerce opportunities in the U.S. in the long run, what it holds more important now is solidifying its share in the Chinese market, which is currently at 80 percent.

"The key issue is whether we are going to have something in the U.S. market that will really target U.S. consumers. We think in the long run that's an interesting market to us. But today, our focus is very much on cross-border activities" connecting U.S. players with Chinese consumers, Alibaba executive chairman Joseph Tsai stated in a November interview.

Apart from its e-commerce strategies, Alibaba has also recently beefed up its smartphone offerings in the local Chinese market.

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