Alibaba, flush from having announced strong Q2 results, has agreed to pay US$2 billion in cash for NetEase’s cross-border e-commerce platform, Kaola.
Alibaba may merge the unit with its Tmall International platform, according to Caixin Global. The transaction between the country’s top cross-border players would create a market behemoth, giving Alibaba a leg up on rival Pinduoduo, which had also taken an interest in Kaola.
Research institute Analysys said Tmall International made up 32.3% of China’s cross-border e-commerce market in Q1, followed by NetEase Kaola with 24.8%.
Growth at NetEase’s e-commerce businesses, comprising the Yanxuan and Kaola platforms, cooled to 64% in 2018, after surges of 275% and 160% in 2016 and 2017, respectively. The expansion eased again to 20.2% in the second quarter of this year, according to the company’s earnings report.