Alibaba-backed
ShopRunner gains momentum, eyes China
Send a link to a friend
[April 06, 2015] By
Edwin Chan and Peter Henderson
SAN MATEO, Calif. (Reuters) - ShopRunner
Inc, the e-commerce startup backed by Alibaba Group Holding Ltd that
styles itself in some ways as the anti-Amazon, more than doubled its
users over the past year and hopes to do so again in 2015, Shoprunner's
chief executive said in an interview.
|
The five-year old online retailer's gains may allow it to win over
more customers who prize convenience and experience over cost
savings, while taking advantage of its Alibaba relationship to help
American retailers sell to China's still-growing middle class.
ShopRunner borrows some of Amazon.com Inc's innovations: it charges
$79 for two-day shipping to Amazon's $99. And it has an express
checkout akin to its larger rival's one-click-buying feature.
But CEO Scott Thompson says ShopRunner aims to be more like an
online shopping mall that showcases brands than an Amazon or eBay
marketplace where the focus is on lowest price.
It also gives partners - ranging from Cole Haan and Under Armour to
Neiman Marcus [NMRCUS.UL] - ownership of customer data and
relationships.
"These businesses spend a lot of money to do the right thing with
their brands," Thompson told Reuters in an interview. "I want the
segment of customer who says I want to pay a fair price, but I want
the experience to be predictable."
![](http://archives.lincolndailynews.com/2015/Apr/06/images/ads/current/farmers_grain_daily_sda_022414.png)
ShopRunner is one of a number of startups nibbling away at Amazon's
dominance of the online arena.
It remains to be seen whether any will make waves. The
soon-to-be-launched Jet, for instance, is raising funds from
investors at a rapid clip and hopes to carve out a niche in
lowest-price shopping.
ShopRunner membership is now at 2.4 million, though it is unclear
how many of those users signed on through American Express Co, an
investor in ShopRunner, which also offers its cardholders free
membership.
Beyond the numbers, Thompson says members are widening their
spending - in much the same way shoppers patronize adjacent
storefronts at the mall. Cross-shopping, when members who start out
buying from one or two retailers evolve to shop from more and more,
grew nearly 60 percent in 2014, from just under 20 percent
previously.
"It's that age-old tenant in the mall that draws customers in, and
people around it benefit from the traffic," Thompson said.
Over the longer term, Thompson hopes to take greater advantage of
ties to Alibaba, the Chinese e-commerce titan that paid $202 million
for 39 percent of the company in 2013.
ShopRunner is one of several U.S. e-commerce companies working with
Alibaba and affiliate Alipay to help U.S. retailers access China.
[to top of second column] |
![](../images/ads/current/demay_inv-lda081412.png)
Through Alipay's nascent "ePass" service, which aims to let Chinese
customers buy and pay for goods from U.S. retailers hassle-free,
ShopRunner helps Neiman Marcus and Cole Haan sell to consumers in
China by marketing their brands to buyers there.
As Alibaba's biggest single U.S. e-commerce investment, ShopRunner
will play a key role in Alipay's effort, although it also has
relationships with sites in which Alibaba has no equity holding.
Thompson wouldn't give specifics but said ShopRunner's own
four-month effort to sell through Alipay was going well and
demonstrated the vast potential of a market in which retailers like
Best Buy have made little headway despite years of effort.
There's some evidence Alibaba's program is taking off. Gilt.com has
seen a doubling in sales to China since it started working with
Alibaba and Alipay.
And iHerb, a little-known purveyor of vitamins and health
supplements, has seen sales surge 693 percent in the first six
months, Alipay Americas president Jingming Li told a conference in
San Francisco on Wednesday.
"This will be, over a three year period, equally as big a business
and equally as compelling," Thompson said.
"It's still early. The opportunity is just too big to miss getting
this one right."
(Reporting by Edwin Chan; Editing by Christian Plumb)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
![](http://archives.lincolndailynews.com/2015/Apr/06/images/ads/current/business_directory_filler.png)
![](http://archives.lincolndailynews.com/2015/Apr/06/images/ads/current/agland_lda_farm_2015.png) |