Alibaba Group has acquired NetEase Kaola for $ 2 billion, the two companies said today, and will integrate it into Tmall, creating the largest cross-border e-commerce platform in China. The announcement follows weeks of media reports of a potential transaction, which is said to have stopped in mid-August, after the companies reportedly disagreed on details of the transactions.
Tmall Import and Export General Manager Alvin Liu has been appointed as the new CEO of Kaola, replacing Zhang Lei, but Kaola will continue to operate independently under its own brand.
Tmall Global and Kaola are the largest and second largest cross-border e-commerce platform in China, respectively owning 31
Alibaba and Yunfeng, an investment company created by Alibaba founder Jack Ma, also agreed to invest $ 700 million in the latter NetEase Cloud Music funding round. This will give Alibaba a minority stake in the streaming music service, with NetEase remaining a controlling shareholder.
In a press release, NetEase CEO William Ding said: "We are delighted to have found a strategic fit for Kaola in Alibaba's vast ecosystem, where Kaola will continue to provide Chinese consumers with high quality import products and services. At the same time, completing this strategic transaction will allow NetEase to focus on its growth strategy by investing in markets that allow us to best reap the benefits of our competitive advantage.
Daniel Jang, CEO of Alibaba Group, said "Alibaba is confident about the future of the e-commerce market for Chinese imports, which we believe remains in its infancy with great potential for growth. “