Alibaba Group Holdings announced the acquisition of NetEase’s import e-commerce platform Kaola for nearly US$2 billion, betting on China’s import e-commerce market growth.
After the deal, Kaola will continue to operate independently under its current brand, according to a press release. Alvin Liu, Tmall import and export general manager, will serve as Kaola’s new CEO.
“We are pleased to have found a strategic fit for Kaola within Alibaba’s extensive ecosystem…," William Ding, the CEO of NetEase, said in the release. "The completion of this strategic transaction will allow NetEase to focus on its growth strategy, investing in markets that allow us to best leverage our competitive advantages.”
Daniel Zhang, CEO of Alibaba Group, commented: “Alibaba is confident about the future of China’s import e-commerce market, which we believe remains in its infancy with great growth potential… With Kaola, we will further elevate import service and experience for Chinese consumers through synergies across the Alibaba ecosystem.”
In addition, Alibaba also announced a US$700 million investment, together with Yunfeng Capital, in NetEase Cloud Music. NetEase will remain the controlling shareholder of the music platform after the latest round of financing. The press release didn't disclose how much of a stake Alibaba will take in the music platform.
The financing, together with its last round of funding worth over US$600 million, led by Baidu in November 2018, will better equip the cloud platform to take on Tencent Music, according to the companies. Owning four music apps in China including QQ Music, Tencent Music has a user base of over 800 million.
NetEase Cloud Music was launched in April 2013 and also has over 800 million users, largely thanks to its distinctive social community and encouragement of original music creation.
“As the controlling shareholder of NetEase Cloud Music, we will continue to fully support the growth of this business, helping it to realize its strategic goals in the music industry,” Ding said.