Alibaba Group verified the purchase of NetEase Kaola for a reported $2 billion after weeks of reports and speculations about a prospective agreement. Chinese e-commerce will be incorporated into Tmall, making it the region’s biggest cross-border e-commerce platform.
As part of the deal, Alvin Liu, General Manager of Tmall Import and Export, will become the new CEO of Kaola, replacing Zhang Lei. However, under its own brand, the company will continue to function separately.
Both Tmall Global and Kaola are the largest and second-biggest cross-border e-commerce platforms in China and presently hold 31.7 percent and 24.5 percent of the market, making them the dominant player, outsizing competitors like JD Worldwide, VIP International and Amazon China.
“We are glad to have found a strategic fit for Kaola within the broader environment of Alibaba, where Kaola will continue to deliver high-quality goods and services to Chinese customers. At the same moment, NetEase will also concentrate on its development approach by investment in the industries that best leverage our competitive edges, “said William Ding, CEO of NetEase.
“As we think it will stay in its infancy with excellent potential for development, Alibaba has confidence in the future of China’s ecommerce export industry,” added Daniel Zhang, CEO of the Alibaba group.