Alibaba have announced they are are buying the Kaola Marketplace for around $2 billion and taking a minority stake in former owners, NetEase Cloud Music.
The Kaola marketplace is a cross-border platform selling Western brands into China with three main business propositions – wholesale buying, an online marketplace or integration with a seller’s own website. Top selling products include baby formula and baby products, clothes, consumer electronics, and sports accessories. Alongside Alibaba Tmall and JD Worldwide, it is one of the largest import marketplaces in China.
Considering NetEase only established Kaola in 2015 to take advantage of the growth of Chinese ecommerce, the marketplace has seen massive success and estimated to have captured around a fifth of China’s cross-border ecommerce.
Kaola will continue to operate independently under its current brand, with Tmall Import and Export General Manager Alvin Liu serving as Kaola’s new CEO.
With both Tmall and the Kaola marketplace, Alibaba will have a huge share of the cross border import business in China. Combining the Kaola marketplace with Tmall will give Alibaba around 39% of cross border ecommerce imports leaving JD in second place with about a 15% share.
“With Kaola, we will further elevate import service and experience for Chinese consumers through synergies across the Alibaba ecosystem.”
– Daniel Zhang, CEO, Alibaba
In recent years, Alibaba have been attracting Western merchants to sell on Tmall, or on TaoBao through local Chinese business partners, so it makes sense to expect to see them add the Kaola Marketplace into their mix when speaking to merchants outside China.