Chinese e-commerce giant JD.Com Inc (ADR) (NASDAQ:JD) has inked an agreement with a Riverside-based trade program, the California State Trade Expansion Program. Under the agreement small-sized manufacturers in California in fields such as lifestyle, food, beauty and health will be assisted in selling directly to consumers in China.
“With 50% of global online retail taking place in China, this is a great opportunity for small California businesses to reach a huge consumer base,” said the project director of STEP, Jeff Williamson.
Online stores
Participants of the program will enjoy various benefits including getting their own JD.com online store where they will have access to over 250 million consumers in China. The participants will also be in a position to leverage marketing resources from JD.com including big data. Additionally California STEP will also screen products on behalf of JD.com as well as assist manufacturers in dealing with the online retail giant. The manufacturers will deliver their products to a central drop-off point located in Los Angeles and thereafter JD.com will take over.
According to Williamson since it costs money to display products on JD.com, the STEP program will foot the bill for up to $1,000. Some of the sources of funding for the STEP program include the United States Small Business Administration. On an annual basis the number of firms that California STEP partners with is about 200. So far it has supported twelve international trade exhibitions.
Alibaba in Mexico
JD.com’s move to source for products for sale to Chinese consumers comes in the wake of its rival, Alibaba Group Holding Ltd (NYSE:BABA), inking an agreement with the Mexican government to have Mexican products sold on its platform. In the deal whose signing was witnessed by the executive chairman of Alibaba, Jack Ma and the president of Mexico, Enrique Pena Nieto, the Chinese e-commerce giant will offer a payment and logistics platform in order to enhance cross-border e-commerce. Chinese residents will also be able to purchase tour and travel packages to Mexico.
Earlier in the year Alibaba hosted an annual summit that was dubbed Gateway 17 and which was held in Detroit, Michigan where U.S. entrepreneurs numbering 3,000 attended with a view to learning how to get their wares into the Chinese market.