Chinese e-commerce conglomerate Alibaba is seeking out strategic international partnerships to boost its suppliers at home, but the collaborations also offer significant benefits for the non-Chinese partners, too.
In its latest move, Alibaba announced Wednesday (March 11) that it has chosen two U.K.-based alternative lenders in an effort to increase purchasing from Chinese suppliers working over Alibaba’s B2B platform. The U.K.’s iwoca Ltd. and ezbob are reportedly the first Alibaba partners of their kind in Europe.
Alibaba reportedly plans to encourage these lenders to increase financing to small U.K. buyers so they can access goods and services from Chinese suppliers. Reports said the alternative financers will offer short term working capital to U.K. SMEs that cannot access traditional bank loans.
“We want to make financing as easy as possible for the millions of British companies that do business through Alibaba.com,” said the company’s European Marketing and Business Development Director Wei Duan.
Reports say ezbob and iwoca are direct lenders, not P2P lenders, and have already done business with sellers on Amazon.com and eBay. Ezbob is the brand name of the financial unit of wireless operator Orange, Orange Money.
Both lenders will offer loans of at least $75,315 to SMEs at interest rates of between 0.75 and 2 percent a month. Those funds will then be channeled to Chinese suppliers that work with Alibaba.
While Alibaba said it will look to strike similar partnerships with lenders in different markets, including Australia, Germany and Canada, this is not the first instance of alternative financing collaborations. The company most recently struck a deal with U.S.-based Lending Club for similar purposes to boost business with Chinese suppliers. In that partnership, Lending Club will lend up to $300,000 to U.S. small businesses with the intent of procuring goods from Chinese manufacturers over the Alibaba B2B e-commerce platform. That partnership was announced in early-February.
According to Lending Club Chief Executive Renaud Laplanche, the partnership “is going to make a pretty big difference in terms of U.S. businesses’ ability to buy goods from China.”