Business / Technology

To US consumers, China's Alibaba is a non-entity

(Agencies) Updated: 2014-09-16 14:02

NEW YORK - The vast majority of Americans have never heard of Alibaba, the Chinese e-commerce company which is on the verge of potentially the world's largest initial public offering.

An Ipsos poll conducted for Thomson Reuters found that 88 percent were not aware of Alibaba Group Holding, which on Monday raised the price range of its initial public offering. The IPO, expected later this week, could overtake the current record, Agricultural Bank of China Ltd's $22.1 billion listing in 2010.

A juggernaut in China, Alibaba sells more than both Amazon.com Inc and eBay Inc combined. It is responsible for 80 percent of online sales in the world's second biggest economy. It operates or works with a number of different businesses there including consumer online marketplace Taobao and payment service Alipay. US businesses can buy bulk supplies from China through its alibaba.com portal.

As a company relatively unknown in the United States, Alibaba could struggle to win much business there, advertising and brand experts said. Consumers pay for goods online with credit or debit cards, and are often reluctant to do business with companies they've never heard of, particularly after recent high-profile hacking problems, said Sarita Bhatt, former global head of strategy at Havas Worldwide, a New York-based advertising agency.

Both Amazon and Ebay spend heavily to help win the recognition and trust of consumers: last year, Amazon.com dedicated roughly $300 million to advertising while eBay spent about $50 million, according to estimates from research firm Kantar Media.

Of course, many US consumers are driven by a good bargain. Shannon Tanzer, a poll participant in Chippewa Falls, Wisconsin, said she had never hear of Alibaba but could be swayed to try. "I just want the best price," she said.

The poll's margin of error was 2.8 percent and 1,604 people were surveyed.

An Alibaba spokesman declined to comment, citing the company's quiet period before the IPO.

To US consumers, China's Alibaba is a non-entity To US consumers, China's Alibaba is a non-entity
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