Alibaba to offer loans for US to buy from China
Print Edition
ALIBABA Group Holding Ltd is teaming up with Lending Club Corp to offer financing to US businesses to buy from Chinese suppliers.
Lending Club, a startup peer-to-peer lending company, said it will provide its core service of matching small business borrowers with lenders on Alibaba.com, the Chinese company’s global wholesale platform.
Under the arrangement, Lending Club becomes the main source of US buyer financing on Alibaba.com. It will offer loans of up to US$300,000, typically for a few months, at rates of 0.5 percent to 2.4 percent — a fraction of the double-digits that credit cards incur.
“They were looking for a technology-aware platform and also a partner that can operate at a low cost, so that the cost of credit for US buyers would be lower,” Renaud Laplanche, Lending Club’s founder and CEO, told reporters.
Alibaba derives the lion’s share of its revenue from retail platforms Taobao and Tmall but it got its start supporting small businesses with Alibaba.com, which Jack Ma co-founded in 1999.
The service is used by businesses on the lookout for cheap products. Alibaba posted revenue of US$631 million in international wholesale commerce in the year to March 2014, a sliver of the US$8.5 billion in revenue over the same period.
Alibaba intends to grow its US footprint by connecting sellers with increasingly affluent Chinese buyers. It is also trying to aid smaller businesses and merchants, an effort analysts say earns goodwill while laying the foundation for a longer-term expansion.
The Chinese company settled on Lending Club because it found its platform faster and easier to use than a traditional bank. The startup, which has provided some US$6 billion in loans since its 2007 inception, is capable of keeping up with demand, said Michael Lee, Alibaba.com’s global marketing director.
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