As difficult as it may seem at this point, it does not stop growing. The Chinese eCommerce giant has reached a deal to buy Kaola for $2 billion (around 1,800 million euros).
Kaola, which until now belonged to , the largest internet provider company in the Asian country, is a eCommerce specialized in selling imported products in Chinaand its catalog consists of clothing, consumer electronics and sports accessories.
With the purchase of Kaola, Alibaba will control half of international eCommerce sales in China
Until now, TMall, owned by , and Kaola were the largest cross-border eCommerce in China, with 31.7% and 24.5% of the market share, respectively, and their union means that from now on Alibaba will create a business that will absolutely dominate its rivals such as , VIP International and , who was already in talks with NetEase to integrate Kaola into its great marketplace.
Although it will be part of Tmall, Kaola will continue to operate independently, although Tmall manager Alvin Liu will be Kaola’s new CEO, replacing Zhang Lei.
CEO of Alibaba Group, said in a statement that the company is confident in the future of China’s cross-border eCommerce market, stating that “it is still in its infancy, with great potential for growth”, also added that “with Kaola we will further elevate the import service and experience for Chinese consumers”
This move is not fortuitous for either Alibaba or NeatEase. While Alibaba reported better-than-expected revenue and profit for its latest quarter last month, . The purchase of Kaola could boost its growth by doubling its market share in international eCommerce.
Do not forget that it is one of the largest e-commerce markets in the world. predicted that this 2019, the Asian country will achieve sales of 1.9 trillion dollars, what represents three times the sales achieved by eCommerce in the United States.
NeatEase will power your music service
The agreement also includes Alibaba and investment firm Younfeng, launched by the founder of the Group, will invest 700 million dollars (just over 630 million euros) in NeatEase Cloud Music on your next . While this will give Alibaba a minority stake in the streaming music service, NeatEase will continue to be the controlling shareholder and power its service.
CEO of NeatEase assured to be delighted of “to have found a strategic fit for Kaola within Alibaba’s extensive ecosystem, where Kaola will continue to provide Chinese consumers with high-quality imported products and services. At the same time, the completion of this strategic transaction will allow NetEase to focus on its growth strategy, investing in markets that allow us to better leverage our competitive advantages.”
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