How Global Ecommerce Benefits American Workers And The U.S. Economy

The U.S. business community and Chinese consumers are a powerful combination when it comes to American job creation. In addition to more jobs, the economic connection also delivers enhanced wages and a growing GDP contribution on U.S. soil, according to produced by NDP Analytics.

Alibaba — a leading global ecommerce company — is a particularly powerful engine in helping American businesses of every size sell goods to more than 1 billion consumers on its digital marketplaces in China. In 2020, U.S. companies completed more than $54 billion of sales to consumers in China through Alibaba’s online platforms.

Using economic multipliers published by the U.S. Bureau of Economic Analysis, NDP estimates that the ripple effect of this Alibaba-fueled consumption in 2020 supported more than 256,000 U.S. jobs and $21 billion in wages. These American sales to Chinese consumers also added $39 billion to U.S. GDP.

“These sales not only generate billions for U.S. brands,” said Mary Donovan, principal and economist with NDP, “but they result in substantial contributions to the companies along the supply chain and communities across America.”

Pandemic recovery

That is welcome news for the American business community, still reeling from pandemic-induced uncertainty and now the threat of further international economic stress.

In earlier stages of the pandemic, for instance, COVID-19 restrictions reduced revenue from in-store sales, disrupted daily operations and strained supply chains for many industries. It also forced businesses to rely more heavily on different markets or suppliers.

Companies scrambled to rethink their ways of doing business. This often involved the increased use of ecommerce platforms, which helped spur American brands to go digital and sell their products and services online. In this way, they expanded their international reach with new customers. California-based for example, saw sales of its guitars increase by over 50% through using Alibaba’s Tmall platform in China from January to July 2020.

“While the pandemic has been very difficult from a public health standpoint, it has led the business community to adapt and accelerate their use of ecommerce,” said Bill Anaya, head of International Government Relations for the Americas at Alibaba Group. “We’ve seen many U.S. businesses, both big and small, go beyond the home market to grow their sales abroad.”

For brick-and-mortar stores, ecommerce channels provided a welcome supplement to wavering in-store revenue. For sellers, including individual artisans, startups and non-store retailers, ecommerce offers a way to reach a customer base around the world due to digital tools.

“Small businesses represent well over 90% of U.S. firms generating revenues and jobs,” added Mary Brady, president and CEO of the Economic Club of Washington, D.C. “A successful cross-border technology platform like Alibaba, with a focus on individuals and small businesses, has demonstrated it has an impressive convening and multiplier effect for U.S. companies doing business around the world.”

Going global, digitally

U.S. brands sell their products to Chinese shoppers through a variety of Alibaba’s digital marketplaces. Larger, well-known brands sell through Alibaba’s Tmall. Smaller and medium-sized brands use Tmall Global, a dedicated cross-border platform. With Tmall Global, even businesses that do not have a physical presence in China are able to market and sell their products to Chinese consumers.

While engaging with this broad new base of global consumers, brands and retailers are also capitalizing on digital tools to meet new demand for convenience and customization.

Many signature American brands, for instance, leverage Alibaba’s digital infrastructure to develop new products tailored to the Chinese consumer. Since launching in 2017, Alibaba’s Tmall Innovation Center (TMIC) has worked with more than 150 corporations including P&G, Mars, Mondelez and Mattel to identify category growth opportunities and customize product designs and assortment for Chinese consumers.

American workwear brand worked with TMIC to localize its product strategy and design a collection of graphics-focused hoodies based on insights from young Chinese shoppers. A household name for industrial workwear garments in the U.S., the brand’s industrial-chic style has gained popularity in the creative community among young designers, skaters, visual artists and dancers in China.

Widespread impact

As the business world seeks more stable footing, ecommerce platforms like Alibaba will continue to play a significant and growing role in strengthening the U.S. economy.

“The NDP research demonstrates not only the importance of access to global markets for U.S. businesses, but the impact that sales of American products have on the U.S. economy,” said NDP’s Donovan. “Sales of American goods on Alibaba’s ecommerce platforms impact the entire supply chain, generating U.S. jobs, supporting wages for American workers and adding billions to the U.S. GDP.”

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