Alibaba and Ant Financial to invest $1bn in local services/AFP
SHANGHAI, June 23- China’s e-commerce giant Alibaba and a financial affiliate part-owned by its chairman Jack Ma will pour nearly $1 billion into a local services mobile platform to compete with rival Tencent.
Alibaba and Ant Financial Service Group will each invest $483.3 million and take 50 percent stakes in mobile shopping and dining information app Koubei, Alibaba said in a statement emailed to AFP on Tuesday.
Koubei connects users to businesses and service providers such as restaurants in their immediate area, and will initially focus on food and beverages before expanding into offline retail and healthcare.
Alibaba’s rival Chinese Internet giant Tencent has already established a foothold in the field. It acquired 20 percent of local service provider Dianping in February last year, and followed up four months later by spending $736 million for a similar stake in 58.com, another such firm.
“Location-based services is a really big market,” Li Yujie, Hong Kong-based analyst at RHB Research Institute, told Bloomberg News.
“Establishing it as an independent business shows that Alibaba is putting a lot of emphasis on it.”
Koubei is not a brand new platform and was previously operated through Alibaba’s consumer to consumer platform Taobao.
“Consolidating our resources under Koubei allows us to capture opportunities that navigate both the offline and online markets,” Samuel Fan, CEO of Koubei, said in the Alibaba statement.
Ant Financial owns Alipay, a Paypal like service which handles around 80 percent of online payments in China.
It has closed a private placement that would value it at more than $40 billion, two sources on Friday told Bloomberg News, which added Ant Financial was planning an initial public offering next year.
Ant Financial could not be reached for comment. Ma is a significant shareholder in the firm.
Alibaba’s Tmall.com is believed to command more than half the Chinese market for business to consumer transactions while its Taobao platform holds more than 90 percent of the consumer to consumer market in China.
