NEW YORK (MainStreet) — A few days ago, e-commerce giant Alibaba (BABA) rocked the world of video streaming with the announcement that it will start Tmall Box Office (TBO), its own streaming service that will initially be limited to China. That prompted pundits to ponder exactly how immense this threat is to streaming darling Netflix (NFLX) if the Chinese competitor eventually poaches American consumers.
TBO's potential viability stateside also begs a blunt and fundamental consumer question: Will U.S. customers trust a China-based company with their personal information?
Mark Tan, a financial advisor with Thrivent Financial in Lake Forest, Ill., predicts Alibaba will eventually enter the U.S. market with streaming, even though offerings are currently relegated to China. Founder and current executive chairman Jack Ma always has seen Alibaba as not just a Chinese company, but a global one, Tan said.
"Our mission, the mission of all of Alibaba, is to redefine home entertainment," Patrick Liu, Alibab's head of digital entertainment, told Reuters of the TBO announcement. "Our goal is to become like HBO in the United States, to become like Netflix in the United States."
Alibaba will follow the Netflix business model, buying some third party content, but will also develop its own, unique programming, according Tan.
Netflix, meanwhile, had been considering its own entry into China. When asked about those plans as well as Alibaba's possible entry into the U.S. market, Netflix declined to comment.
If Alibaba enters the U.S. market with video streaming, it will not necessarily have smooth sailing. Last year, Bizrate Insights surveyed over 3,500 online buyers and found a majority (63%) are not familiar with the Chinese e-commerce giant.
Bizrate Insights continued: "Of those who are familiar with Alibaba, 65% are likely to interact with (browse or purchase from) a Chinese e-commerce company in general."
The biggest concerns respondents expressed about Alibaba were long delivery windows, distrust over security of personal and payment information and a preference to "Buy American."