quora Chinese Firm Alibaba Acquired Koala for $2B

Chinese Firm Alibaba Acquired Koala for $2B

Chinese e-commerce company Alibaba announced its acquisition of NetEase’s import e-commerce platform Koala. It bought it for about $2 billion to strengthen its foothold in the online retailing sector.

Furthermore, both headquartered in Hangzhou; the two companies plan to explore collaborations and know more business initiatives. Fortunately, Koala can still run independently as a subsidiary of Alibaba but under its current brand. Aside from that, Tmall Import and Export General Manager Alvin Liu will be the new CEO of Koala.

Aside from that, NetEase has another agreement with Alibaba and its business affiliate Yunfeng. And it is for an approximately $700 million investment in its music-streaming service, NetEase Cloud Music. However, the Chinese tech firm will still be the controlling shareholder of NetEase Cloud Music after this deal. But this might close with certain conditions.

NetEase CEO William Ding stated, “We are pleased to have found a strategic fir for Koala within Alibaba’s extensive ecosystem, Where Koala will continue to provide Chinese consumers with high-quality products and services.” He also said that upon the completion of the deal, it would let NetEase focus on its growth strategy. Also, it will concentrate on investing in markets that will allow it to best leverage its competitive advantages.

Chinese E-Commerce Industry

Meanwhile, the import online retailing before was a prosperous niche in the Chinese e-commerce industry. However, in recent years, market growth has moderated somehow after tightened regulations affect smaller players.

Moreover, the Tmall Import unit of Alibaba and Koala, in the first half of the year, are the two leading players. And their combined market share is over 50%.

Alibaba Group CEO Daniel Zhang stated, “Alibaba is confident about the future of China’s import e-commerce market, which we believe remains in its infancy with great potential.” Zhang added that they welcome Koala to the Alibaba family. And they value the contributions of NetEase in breeding an e-commerce platform with powerful import capabilities.


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