What trade war? Alibaba splurges $2 billion on its e-commerce rival for foreign goods.

Another reason to shop.

Alibaba is spending $2 billion to acquire its largest rival in online sales of imported goods, a sign of its confidence in China’s desire for stuff from abroad in spite of a slowing economy and the ongoing trade fight between China and the US.

The deal, announced today (Sept. 6) and still to be finalized, would see China’s largest e-commerce company, whose business empire stretches from mobile payments to entertainment, monopolize the country’s online cross-border sales. The first six months of the year saw Kaola, owned by gaming giant NetEase, leading the segment with close to a 28% share, while Tmall followed closely with 25%, according to iiMedia Research (in Chinese). The two far outstrip rivals such as JD.com’s imported goods channel JD Worldwide and Amazon China.

The acquisition is expected to diversify Tmall’s business model, which largely involves inviting foreign brands to launch online shops on its site, while Kaola for the most part purchases a variety of goods directly from foreign merchants in bulk and then resells them to Chinese consumers.



By Jane Li.
Full story at Quartz.