Office Depot and Alibaba team up to tap small and medium businesses

(Reuters) - Office Depot on Monday teamed up with Alibaba Group Holdings Ltd to launch a co-branded e-commerce website, seeking to tap into the opportunities of selling to small and medium businesses in the United States.

Slideshow ( 2 images )

While the Chinese e-commerce giant has inked deals with U.S. companies including Kroger Co to sell products in China through its online marketplace, the deal with Office Depot marks’s first business-to-business collaboration with a major U.S. company.

The partnership would give Alibaba access to Office Depot’s 10 million customers and 1,800 sales agents.

Alibaba would also be able to take advantage of Office Depot’s distribution network that offers next day delivery in the United States, the companies said in a joint statement.

Office Depot’s customers will also get access to Alibaba’s global network of over 150,000 suppliers to find more product options or a reputed manufacturer to produce their goods.

For instance, a cutlery maker with a special design can find a factory to make it, which can be sold to restaurants or retailers across the world using platform, John Caplan, head of North America B2B at Alibaba Group, said in an interview with Reuters.

The deal is aimed at shortening delivery time, besides giving small and medium U.S. businesses opportunities to sell beyond the United States through

“This is a great catalyst for growth for small and medium businesses in the United States. We believe it is going to save them time, it is going to save them money,” Office Depot Chief Executive Officer Gerry Smith told Reuters.

The partnership comes as Office Depot struggles to boost sales amid severe competition from e-commerce giant Inc. It is now focusing on selling business services to their customers, rather than relying on its traditional business of selling office supplies.

Office Depot’s business-to-business sales have grown to become its largest revenue generator in 2018, while its retail sales have declined in the last two years.

Shares of Office Depot were up about 1 percent, while shares of Alibaba were up 1.4 percent.

Reporting by Soundarya J in Bengaluru; Editing by James Emmanuel