Chinese e-commerce giant Alibaba is taking the lead from Amazon in the luxury segment. And it is that the owner of AliExpress has closed an agreement by which he will buy the e-commerce company Kaola from the Chinese gambling company, Net Ease.
With this operation, valued at 2,000 million dollars (1,812 million euros), Alibaba is not only entering the luxury e-commerce segment but also ahead of Amazon, whose Chinese division was behind the purchase of Kaola.
Kaola, owned by Chinese gambling company Net Ease, specializes in luxury e-commerce and distributes clothes, cosmetics and electronics imported from outside the country. The company will continue to operate independently although its executive will change with the appointment of the director of exports and imports of Tmall as the new CEO of Kaola.
But Alibaba's move is not fortuitous. The purchase of Kaola allows it to more than double its market share in international trade in China. And it is that the Chinese company is the largest platform in international trade and brought together 27% of the international trade market share in the first half of 2019. Behind it, a familiar face: the Tmall Global e-commerce platform, owned of Alibaba, with 25%, as reported by The Financial Times referring to the investigation of the investment bank, Jefferies.
Learn how to set goals and achieve them by taking a course in goal setting today. https://t.co/FFZcnLrlC6— Inspirational Quotes Wed Mar 03 16:59:40 +0000 2021
There have been rumors about this possible purchase for a long time, also by the Chinese division of Amazon. And it is that the interest of the e-commerce giants in this Chinese company has to do with the fact that the e-commerce sector in the Chinese market has seen its growth slow down. Now, they are looking for new formulas that can boost their growth and Chinese consumers account for more than a third of the world's income in the luxury goods sector, according to Reuters.
“With Kaola, we will further elevate the import service and experience for Chinese consumers through synergies across the Alibaba ecosystem,” said Daniel Zhang, CEO of Alibaba.
The truth is that NetEase is best known for its games and music division and has been negotiating for about a year to get rid of Kaola. In fact, the agreement includes that Alibaba and the investment firm of the company's president, Yungfeng, will invest 700 million dollars (634.5 million euros) in Net Ease Cloud Music in its next round of financing. And it is that Alibaba and NetEase would have already worked side by side to strengthen their platforms and compete with what is known as Chinese Spotify: Tencent Music.
Prior to the deal, Alibaba was already selling to foreign brands through its platforms. However, Kaola has an inventory of 4,300 international brands from 50 countries and offers a more select collection of products for its wealthy customers.