Alibaba, along with its finance affiliate, invests $1 billion to tap China’s growing online-to-offline market.
Alibaba Group Holding Ltd. together with Ant Financial Services is all set to invest around $1 billion in a latest venture specially serving to its home market. Both these companies are going to invest $483 million each in a combined venture aiming budding neighborhood services of China, with early emphasis on delivery of food.
LI Yujie, an analyst at RHB Research Institute said, “A Location-based service is a really big market. Establishing it as an independent business shows that Alibaba is putting a lot of emphasis on it” reported by Bloomberg.
Online to offline market of China presents substantial potential to firms seeking to gain profits. Consumers in China are increasingly inclined to smartphone applications for their daily endeavors. However, Chinese e-commerce giant targets to reap traction over its rival like Tencent Holdings ADR and Baidu Inc. in the sector. However, as per Reuters, saturation into the online to offline market can be more expensive. Alibaba will be required to invest huge amount to continue its expansion plans.
A spokesperson of Alibaba told Forbes, “Local services are a high-growth sector in China given that most consumption still takes place offline. Forming this JV allows us to focus exclusively on capturing offline consumption opportunities with a dedicated team.”
The combined venture, namely, Koubei will facilitate consumers with their online to offline shopping needs. Therefore, the step will further enhance the joint venture, which lead operations previously through an online platform of Alibaba called as Taobao. As per a statement issued by the company, Koubei will initially target the beverage and food sector. Alibaba spokesperson informed Wall Street Journal that the joint venture will primarily be managing orders from Chinese company’s 2 year old Taodiandian platform, and ultimately via Ant Financials. Both these platforms will be combined under the latest venture.
Furthermore, as per the announcement by the company, Koubei can conduct transactions via Ant Financials platform, Alipay.
In a statement, Ant Financial and Alibaba said, “The joint venture, Koubei, will integrate the convenient aspects of mobile commerce and big data to transform and upgrade China’s local services sector.”
Both Ant Financial and Alibaba are the main investors in the new business holding 50% ownership each. Moreover, Ms. Li while talking to Bloomberg said that the framework of Koubei will simplify the adoption of acquisitions and partnerships, directing improved opportunities for investment. Ant Financials executive, Samuel Fan will be the CEO of new venture.
Alibaba Group Holding Ltd. together with Ant Financial Services is all set to invest around $1 billion in a latest venture specially serving to its home market. Both these companies are going to invest $483 million each in a combined venture aiming budding neighborhood services of China, with early emphasis on delivery of food.
LI Yujie, an analyst at RHB Research Institute said, “A Location-based service is a really big market. Establishing it as an independent business shows that Alibaba is putting a lot of emphasis on it” reported by Bloomberg.
Online to offline market of China presents substantial potential to firms seeking to gain profits. Consumers in China are increasingly inclined to smartphone applications for their daily endeavors. However, Chinese e-commerce giant targets to reap traction over its rival like Tencent Holdings ADR and Baidu Inc. in the sector. However, as per Reuters, saturation into the online to offline market can be more expensive. Alibaba will be required to invest huge amount to continue its expansion plans.
A spokesperson of Alibaba told Forbes, “Local services are a high-growth sector in China given that most consumption still takes place offline. Forming this JV allows us to focus exclusively on capturing offline consumption opportunities with a dedicated team.”
The combined venture, namely, Koubei will facilitate consumers with their online to offline shopping needs. Therefore, the step will further enhance the joint venture, which lead operations previously through an online platform of Alibaba called as Taobao. As per a statement issued by the company, Koubei will initially target the beverage and food sector. Alibaba spokesperson informed Wall Street Journal that the joint venture will primarily be managing orders from Chinese company’s 2 year old Taodiandian platform, and ultimately via Ant Financials. Both these platforms will be combined under the latest venture.
Furthermore, as per the announcement by the company, Koubei can conduct transactions via Ant Financials platform, Alipay.
In a statement, Ant Financial and Alibaba said, “The joint venture, Koubei, will integrate the convenient aspects of mobile commerce and big data to transform and upgrade China’s local services sector.”
Both Ant Financial and Alibaba are the main investors in the new business holding 50% ownership each. Moreover, Ms. Li while talking to Bloomberg said that the framework of Koubei will simplify the adoption of acquisitions and partnerships, directing improved opportunities for investment. Ant Financials executive, Samuel Fan will be the CEO of new venture.