Amazon China’s merger plans with NetEase’s Kaola to challenge Alibaba
Category: #retail  By Pankaj Singh  Date: 2019-02-21
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Amazon China’s merger plans with NetEase’s Kaola to challenge Alibaba

Amazon aims to strengthen its footprint in Chine where e-commerce sales is expected to grow to account for nearly one-third of the all retail sales in 2019, exceeding $1.9 trillion.

The Chinese joint venture (JV) of Amazon.com Inc. is reportedly amidst negotiations with the local e-commerce firm, Kaola, which is owned by leading Chinese Internet technology company NetEase, for a merger transaction. Apparently, the latest move by Amazon China emerges as a challenge to the retail e-commerce leader in China, Alibaba Group.

Kaola, for the record, sells household appliances and apparel among other products and is the biggest Chinese shopping site focusing on imported goods. It imports directly from international manufacturers, with the previous year’s imports amounting to over 5,000 brands from around 80 countries.

As per a report by CCN, the latest development comes up as a support to Kaola’s requirement of an infusion of investment. According to Yang Zhaoyu, Chief Financial Officer, NetEase, the company is currently focused on enlarging the scale of its e-commerce business, increasing brand popularity, enhancing user reputation and expanding the market total. The report further elaborates that the ongoing merger talks are being considered as a last-ditch attempt by Amazon, which is the undisputed-commerce leader in its home country, to catch up with the local e-commerce operators as it still lags behind in the China market in the seventh position.

Sources close to the matter revealed that Amazon, with its burgeoning profits and sales, has injected billions of dollars into several developing markets such as India and China, hoping to generate future profits. Sources also reported that the online retail giant’s international operating loss fell to $642 million in the fourth quarter from $919 million a year ago.

According to industry experts, China dominates the global e-commerce space, with its sales expected to grow to account for nearly one-third of the all retail sales this year, exceeding $1.9 trillion. Apparently, the escalating e-commerce sales in China can be credited to the rising incomes of a significant portion of the population, which signals a historical opportunity for Amazon that should not be missed.



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Pankaj Singh

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Pankaj Singh

Pankaj Singh Develops content for Market Size Forecasters, Algosonline, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

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