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Alibaba Plans Niche Approach to U.S. Market

Chinese e-commerce giant Alibaba’s decision to list its shares in the U.S. doesn’t mean it’s planning a major push into the U.S. online retail business—at least not right away.

At the annual Morgan Stanley technology conference in San Francisco two weeks ago, Alibaba executive vice chairman Joe Tsai said the company had no plans to go head-to-head with Amazon.com by selling mainstream products to consumers in the U.S. Instead, he told bankers during a fireside chat, the company, whose main business is selling ads and Web services to merchants in Asia, would focus first on a few niche U.S. markets, according to a person who attended.

The remarks go to one of the burning questions about a spate of new Asian tech companies eyeing U.S. IPOs: Are Asian tech giants trying to go head-to-head with U.S. tech behemoths on their home turf? Or are the efforts more limited, aimed familiarizing potential shareholders with the company and learning the U.S. market for possible future initiatives?

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But Mr. Sampere believes that is just a start: “I think they have everything figured out, and that big box retailers should be worried about this because if one online pure player took away a significant part of their growth imagine two of this size and aggressiveness,” he said in an email.

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Alibaba’s main U.S. website shows a hodge-podge of discount goods but lacks the slick presentation and features that U.S. online shoppers have come to expect. But Alibaba is making investments that will allow the company to compete in niche markets in the near term.