Alibaba buys rival Kaola for $2bn after Amazon merger scrapped

Alibaba is set to acquire Kaola, a rival Chinese ecommerce platform for around $2 billion as China’s online retail market begins to consolidate.

Kaola is an ecommerce platform owned by NetEase, another Chinese tech giant specialising in gaming and content, understood to be the most popular retail platform selling imported goods.

NetEase has reportedly been trying to sell its Kaola platform for around a year, with Amazon’s Chinese joint venture exploring a possible merger earlier this year before having to scrap the deal when pulling out of China in July.

READ MORE: Alibaba revenues jump 42% as it brushes off trade war concerns

Unlike Alibaba’s Tmall and Taobao platforms which act as a marketplace for third-party sellers, Kaola buys inventory directly from brands overseas.

It imports from over 4300 brands across 50 countries, though this was a sharp decrease on the 5000 brands seen a year earlier.

This comes just days after Alibaba revealed a surprise 42 per cent jump in quarterly revenues, coming well above analyst expectations who feared the escalating trade war would hinder its financial growth.

China’s online retail market is expected to be worth nearly $2 trillion this year, rising to a further $2.4 trillion in 2020, nearly doubling the US’ projected ecommerce market value of $587 billion this year.

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