Alibaba Group has bought the e-commerce platform of NetEase for about $2 billion and will participate in a $700 million investment in NetEase’s music streaming service, the two Chinese firms said on Friday.
The deal hands Alibaba the biggest Chinese online marketplace for foreign brands after its own Tmall Import and Export.
Kaola will now operate independently but under new Chief Executive Officer Alvin Liu, a Tmall veteran. Separately, Alibaba and billionaire co-founder Jack Ma’s Yunfeng Capital will invest $700 million in NetEase Cloud Music. NetEase remains the controlling shareholder of its music app.
The deal is expected to boost Alibaba in its battle against Chinese rivals such as JD.com and Pinduoduo to remain the country’s top brand for e-shopping.
“Alibaba is confident about the future of China’s import e-commerce market, which we believe remains in its infancy with great growth potential,” said Alibaba CEO Daniel Zhang.
The deal comes just days ahead of Ma’s planned departure as Alibaba chairman next week, when he plans to pursue private education initiatives.