Alibaba said Friday it will acquire a cross-border e 3-commerce business unit, Kaola, from the Nasdaq-listed Chinese internet company NetEase for about $2 billion, according to CNBC.
Kaola sells imported products in China that include clothes, consumer electronics, and sports accessories. It is one of the biggest Chinese e-commerce sites focused on selling imported goods in the country, alongside Alibaba’s Tmall Global and JD.com’s JD Worldwide.
Alibaba said it plans for Kaola to continue operating independently under its current brand, but it will have a new leader at the helm. Tmall Import and Export General Manager, Alvin Liu, will take over as CEO.
With Tmall Global and Kaola, Alibaba will have a massive market presence in the cross-border e-commerce sector.
With Alibaba’s acquisition of Kaola and its investment into NetEase Cloud Music, NetEase can “further optimize its costs while Alibaba strengthens its leadership in cross border ecommerce,” Jefferies analysts wrote in a note on Friday.
China is one of the largest e-commerce markets in the world, with research firm eMarketer predicting in a June report that in 2019 the country will have $1.935 trillion in e-commerce sales, about three times more than the United States.
Daniel Zhang, chief executive officer of Alibaba Group, said in a statement that the company is confident about the future of China’s import e-commerce market which he said, “remains in its infancy with great growth potential.”
“With Kaola, we will further elevate import service and experience for Chinese consumers,” he added in a statement.
„Though Libra has met with fierce resistance from central banks and supervisory authorities and might never see the light of day, in many other cases tech firms (both start-ups and established big players) have successfully captured bits and pieces of universal banks’ traditional value chain. This trend may only intensify in the coming years. In this environment, European banks remain squeezed.”