Alibaba will acquire cross-border platform Kaola from NetEase for $2 billion, the company said Friday, in a deal that will allow the group to control over half of China’s cross-border ecommerce market.
Kaola, which sells a wide array of imported products in China from clothes, beauty, consumer electronics, and more, will continue to operate independently under its current brand, although Tmall import and export general manager Alvin Liu will take on the role as Kaola’s new chief executive officer.
The move “paves the way for the two internet companies with deep roots in Hangzhou to further identify and explore business collaborations,” Alibaba said.
Alibaba will also be investing, together with Yunfeng Financial Group, approximately $700 million in NetEase’s streaming music business in its latest round of financing. NASDAQ-listed NetEase will remain the controlling shareholder of NetEase Cloud Music.
According to data from Analysys, at the end of last year, Tmall Global held a 31.7 percent share of the cross-border market, while Kaola had about 24.5 percent. In comparison, JD Worldwide stood at 11.5 percent, and VIP International 9.7 percent.
In total, China’s cross-border e-commerce market value was 90.83 billion renminbi, or $12.70 billion at current exchange, in the first quarter of this year, according to Analysys.