Alibaba to buy Chinese e-commerce business ‘Kaola’ for $2 billion

Published:

On: Sep 2019

On Friday, Alibaba said that it will gain a cross-border e-commerce business unit called Kaola, from the Nasdaq listed internet company of China, NetEase for nearly $2 billion. Kaola sells said to be imported products in China which contain sports accessories, clothes and consumer electronics.

It is considered to be the greatest Chinese e-commerce site concentrated on selling imported products in China, alongside Tmall Import of Alibaba and JD Worldwide of JD.com. Furthermore, Alibaba said that we have plans for Kaola in order to continue operating individually under its current brand, but it will have a brand new office at the helm. Alvin Liu, Tmall import and export general manager will take over as CEO.

With Tmall Worldwide and Kaola, Alibaba will have a huge market presence in the cross-boundary e-commerce sector. Alibaba’s acquisition of Kaola along with its investment into NetEase Cloud Music and NetEase can further fragment its costs while Alibaba strengthens its leadership in trans-border eCommerce.

China is the world’s biggest e-commerce market, with research company eMarketer indicating in a June 2019 report wherein China will have $1.935 trillion in e-commerce sales around 3 times over the United States of America. The chief executive officer of Alibaba Group, Daniel Zhang said that “the firm is confident about the future of Chinese import e-commerce industry which remains in its early stage with massive growth potential.”

He also said, “With Kaolam we will be looking forward to initiating import service and experience for the consumers of China.” At the start of this year, Amazon’s Chinese joint ventures were in discussions to merge with Kaola.

The core commerce business of the company contains its Tmall and Taobao shopping platforms and also its growing cloud division contributed to the growth. Yearly active consumers on Alibaba’s Chinese retail marketplaces reached around 674 million, an increment of 20 million and most of those newer customers was from less-developed cities.