There are some predictions that 50 percent of major U.S. retailers will be gone by 2020. While it is too early to predict the demise of bricks and mortar, it’s a no brainer to forecast the rise of e-commerce. Many Americans have never heard of Alibaba, who will soon surpass Amazon in size. And, while it is not branded as Alibaba, their new venture 11 Main is a great example of increasing differentiation online, and the new star wars battle for worldwide reach. 11 Main is just one example of many new online formats being launched by the titans of e-commerce.

Why this is important: Consumers worldwide will have unparalleled choices of where to shop, and bricks and mortar stores will face an avalanche of competition.

Like most U.S. consumers, most of us don’t recognize the orange logo

Most consumers in the U.S. do not recognize the orange logo, or the name Alibaba. Alibaba is the fastest growing e-commerce conglomerate in China. Because of the size of the Chinese market and the accelerating growth of online shopping, Alibaba is projected to quickly dominate e-commerce worldwide.

• Just two of Alibaba’s e-commerce portals transacted $170 billion 2012, more than eBay & Amazon combined
• Alibaba invested $200+ million in ShopRunner, which is forecast to overtake Amazon as No. 1 e-commerce site
• Alibaba is coming to the U.S. to go head to head with Amazon and all retailer web sites

Amazon U.S. format evolving and scaling their model worldwide

Amazon has been a unique U.S. phenomenon. They have been trying to scale their business under one brand identity. While Amazon has been an incredible innovator in U.S. retail and delivery, Amazon clearly understands the potential of e-commerce beyond the U.S. It operates in over 45 countries, including China.

Alibaba is multi-brand conglomerate inventing e-commerce specialization

Many Chinese might not even recognize the orange logo or the Alibaba brand. They are much more likely to shop on Alibaba owned and wildly popular consumer oriented Chinese sites Toabao and Tmall.

What seems to be a core Alibaba strategy is to invest in names and brands as ways to enter markets. For example, Alibaba’s $200+ million investment in ShopRunner is a key strategy to quickly ramp up Western e-commerce and to compete directly with Amazon, who has literally been doing business on Alibaba’s home turf in China.

Alibaba’s holistic multi-brand strategy for multi-channel growth

Alibaba has also made significant investments in another strategic brand AutoNavi map services. It is estimated that 1 in 4 mobile users accessed AutoNavi in China. This bodes well for the explosion of mobility in China and the ability of Alibaba to integrate services like hotels, restaurants and even mobile payments through phones. Clearly Alibaba has a holistic, multi-brand strategy that is focused on more than just selling products online.

Alibaba has already acquired companies like Vendio and Auctiva. These companies were established to help other retailers and companies sell products on Amazon and eBay. Alibaba’s acquisition indicates that they see the opportunity to rapidly evolve in ways to directly compete with the new e-commerce marketplaces like eBay’s The Plaza.

11 Main An Alibaba specialty commerce site coming to U.S. soon

I can almost guarantee that few U.S. citizens will recognize the new 11 Main site as a foreign e-commerce site owned and developed by Alibaba. I’m also quite sure that is by design.

As you can see from the screen shot of the home page, 11 Main is quite unique.

• It is a site that is by invitation only you have to apply as a vendor seller
• The site is designed to focus on quality products, non-commodity categories
• 11 Main provides the infrastructure for the site, and the shipping options
• Focus on creating customer relationships and follow-up through integrated marketing
• Approach is to curate products and shops in online mainstreet U.S. environment

Will 11 Main work in the U.S. I don’t know. It’s too early to tell. Initial success will require the ability to recruit the right vendors and sellers with the right products in order to create the main street feel, and differentiated shopping environment. It will also depend upon Alibaba’s ability to create a U.S. infrastructure for vendor sellers that is: a) as cost competitive as eBay’s and Amazon’s associate selling structure, and b) able to deliver the high quality consumer experience and services that U.S. consumers have grown to expect via Amazon.

If there’s any doubt that 11 Main is targeted directly at Amazon, look at this screen shot:

What does all of this mean for the future of retail?

The space of this one blog barely scratches the surface on the rapid explosion in e-commerce. eBay is certainly not standing still. They have been rapidly testing Buy it Now iterations as well as rolling out The Plaza, which is focused on recruiting associate sellers like 11 Main. eBay has also been very innovative in crossing over to bricks and mortar retailers enabling shoppable touchscreen windows on their store fronts.

Even if you are on the right track, you will still get run over if you are not moving fast enough. The large e-commerce retailers are definitely on the right track and moving much faster than bricks and mortar.

Three key predications for rapid evolution of e-commerce retailing:

1. The mega e-commerce players will increasingly specialize with new formats, offerings and services, for both the vendor/sellers and the end consumers.
2. Consumers win with increasing competition that creates unparalleled choice & value.
3. Traditional bricks and mortar retailers are going to have a very tough time surviving if they don’t realize that omni-channel is the new normal.

Chris Petersen / Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions is a strategic consultant who specializes in retail, leadership, marketing, and measurement. He has built a legacy through working with Fortune 500 companies to achieve measurable results in improving their performance and partnerships. Chris is the founder of IMS Retail University, a series of strategic workshops focusing on the critical elements of competing profitably in the increasingly complex retail marketplace.