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Alibaba Going Global Part IV: And The Money Keeps Rolling In...

Alibaba's (BABA) decision to pick Lending Club (LC) to be its strategic partner is a clear indication that the company looks to break down geographic barriers and facilitate cross-border ecommerce. Under the strategic agreement, LC and BABA created a new product called "Alibaba.com e-Credit Line powered by Lending Club," and BABA's US-based SMEs can apply in under five minutes via a streamlined process and obtain a line of credit from $5k to $300k at a monthly interest rate between 0.5% to 2.4%. This allows US SMEs to apply for the critical working capital they need when purchasing goods from China-based suppliers on Alibaba.com.

The generous credit amount and the lower than expected interest offer compelling value to US-based SMEs, in my view. Broader rollout of this service to the >10m SMEs in the US is likely to drive BABA's ecommerce platform higher and, most important, the merchant relations that BABA… Read More …