In the past two months, the koala’s whereabouts have been in the speculation of “selling” and “not selling”, until today’s official announcement.
Editor’s note: This article is from WeChat public account “Sprout NewSeed” (ID:pelink ), the author entrepreneurial warm baby.
In the end, NetEase koala was sold to Ali for a price of $2 billion.
On September 6, NetEase and Alibaba jointly announced a strategic cooperation. Alibaba Group will acquire Netease’s cross-border e-commerce platform koala for US$2 billion, and Liu Peng, general manager of Tmall Import and Export Group will concurrently serve. Koala CEO, and the Koala brand will continue to operate independently. At the same time, Alibaba participated in Netease Cloud Music’s $700 million financing as a lead investor.
Ding Lei once called the home appliance business platform before the double 11 last year: “I think it is enough to use our platform, with koala, strict selection, peace of mind and benefits.” After a lapse of 9 months, The peace of mind and affordable NetEase koala is easy to change.
The outside world is rumored and the koala is still sold
Before the transaction was officially announced, there were rumors about the arrival of Netease koala employees. Some NetEase koala employees posted a message: Tonight is the sleepless night of the koala.
A netizen said: “The high probability of koala is true. In the face of Netease this company, the heart is extremely disappointing. Reasonable, although the koala is very bad, but it is already considered better on the NetEase Internet side. Departments. Loss? Strictly choose cloud music and other businesses, which is not a loss? Koala was established four years, the first nine consecutive quarters of cross-border e-commerce domestic share first, really a good hand, and then sold? Really can not figure out. After a loss of nine years, and a lot of losses for four years, Jingdong also lost money for countless years before the profit, the boss did not give up. And the koala, only four years, was abandoned.”
In the past two months, the koala’s whereabouts have been in the speculation of “selling” and “not selling”, until today’s official announcement.
Ding Lei’s e-commerce dream began in 2014. At that time, the General Administration of Customs issued the “No. 56 Document” and “No. 57 Document” for the cross-border e-commerce industry, and the overseas purchasing market that is about to enter the threshold of “100 billion yuan” ended the state of barbaric growth for several years. Good news has been ushered in in terms of taxation and channels.
The business opportunities in this area were not missed by Ding Lei. The cross-border e-commerce platform “Netease Koala Haishang”, which is based on the concept of self-operated direct mining, was launched on January 9, 2015. The platform has been highly anticipated by Ding Lei since its inception. He once said at the 2nd World Internet Conference, “In the next three to five years, NetEase Koala will acquire 50 billion to 100 billion in the market and re-create a NetEase in the e-commerce field.
Netease Koala Haitao is also very competitive. According to the 2015 NetEase financial report, Netease’s mailbox, e-commerce and other businesses achieved a net income of 3.699 billion yuan in 2015, and the development momentum is good.
Netease Koala Haitao, which verified the feasibility of the model, was officially launched in March 2016 and ushered in a year of rapid market share. According to data released by iiMedia Research, in 2016 China’s cross-border e-commerce retail import sales, NetEase Koala Haibu ranked first with 21.6% market share, surpassing Tmall International and JD Global. Since then, Netease Koala Haitao has continued to rank first in the cross-border e-commerce industry. Ding Lei’s dream of “recreating a NetEase” seems to be on the way.
After that, Netease Koala Haitao ushered in a name change in June 2018 and changed it to “Netease Koala”. On the surface, it is a “deleted” cross-border functional attribute, which actually represents the greater ambition of Netease Koala. After the name change, Netease koala still focuses on imported goods and bonded import models, but its direction has shifted from a typical vertical cross-border e-commerce to a comprehensive e-commerce platform.
Netease Koala took the first step in the transformation at last year’s Expo. It signed a huge order of nearly 20 billion RMB with more than 110 global brands and began to get rid of the inherent “niche” image.
In addition, Netease koala also embarked on the road to lay down the store. On January 20 this year, NetEase Koala opened its first offline flagship store; on April 27th, its “Global Factory Store” offline store was launched in Hangzhou. The NetEase Koala No. 1 warehouse also opened in Ningbo in June this year.
The dream of “recreating a Netease” is still lost
Under the series of triumphant moves of NetEase koala, there are some problems that cannot be ignored.
Because there is no self-built logistics, NetEase koala can only hand over logistics and distribution to third parties, and this is also prone to uncontrollable factors, resulting in Netease koala has repeatedly received user complaints. Orders arrive for a long time, often canceled. And other issues.
Not only that, NetEase koala also suffered from “sales of fake”. First, in February 2017, Estee Lauder China Company identified Estee Lauder ANR Eye Cream for sale as a counterfeit and shoddy product. Later, at the beginning of this year, consumers complained that the Canadian goose down jacket purchased on Netease koala was fake. The process has been repeated for three months.
Although the final official identification results of these two incidents are all genuine, the disputes that have been repeated have not only affected the consumer experience, but also reduced the brand credibility of the Netease koala. It also indirectly shows that the koala is not enough. Fully implement its supply chaincontrol.
At the same time, since the beginning of this year, Netease koala has repeatedly reported layoffs. According to the IT Times, “Netease has different layoffs in different departments. NetEase koala will cut about 20% of its employees.”
The negative impact of the above problems is very obvious in Netease’s latest financial report. According to Netease’s second quarter financial report for 2019, e-commerce business revenue increased by 20.2% year-on-year, the lowest growth rate since the first quarter of 2017, and the cost of e-commerce business increased by 19.25% year-on-year to reach 4.677 billion yuan.
Under the weight, Netease Koala needs new growth points to consolidate its market share. In the 2018 Netease fourth quarter earnings conference call, NetEase CEO Ding Lei once said that “Netease is open to strategic cooperation and strategic investment in e-commerce business.”
So, NetEase koala has become more active in the capital market. In February this year, it was revealed that Netease Koala would merge Amazon China’s overseas purchase business, and Netease Koala initiated and promoted it, and the two parties may adopt a share swap method. However, as Amazon China shut down its local e-commerce business, changed its business direction, and only retained its overseas scouring business, the deal between the two ended up being lost.
After that, NetEase koala has converted its role from “buy” to “sell”. It is reported that since March of this year, Netease koala has been actively peddled, and contacts include Ali and more. Just because of the brand fit and the purchase price, the company did not reach a deal with NetEase Koala, and it allowed Ali and Netease Koala to enter into substantive negotiations.
In this regard, Ding Lei’s dream of “recreating a NetEase” in the e-commerce field has failed.
Ali’s most expensive investment this year
$2 billion, which is a high cost in Ali’s investment landscape for the past two years.
Reviewing the investment from 2018 to the present, the amount of the acquisition of NetEase koala is only after the acquisition of Hungry in April 2018, and the WPP of the US$2.5 billion strategic investment in the UK enterprise service platform, with the same 2 billion capital increase in Southeast Asia. The amount of Lazada is flat. Once successfully acquired, Netease Koala can count the second most expensive company Ali bought in China in the past two years.
As we all know, most of the investment in the venture circle “super buyer” Ali is strategic investment. Making money is not an end. All investment M&A projects are centered around the main line, and continue to expand Ali’s business map. For example, the acquisition of Hungry has complemented Ali’s local life shortcomings and formed a new retail strategic layout.
With the rumor of a $2 billion acquisition of NetEase koala, there will be news of its integration with Tmall International. Tmall International has a strategic height in Ali, in March this year, at the launching session of the first Expo.Tmall International officially upgraded to the Ali Import Division, and announced that it will continue to increase investment, import coverage of more than 120 countries and regions within five years, and expand the number of products from 4,000 categories to more than 8,000 categories.
In the cross-border e-commerce sector, Tmall International and Netease Koala occupy half of the country. The market increase is rare. For Tmall International, NetEase koala is undoubtedly the enemy of chasing after the rush, buying koala, it represents more than half of the market share, but also the warehousing and logistics belonging to Netease koala Various resources such as categories and categories are sorted out and collected in the bag, which can reduce unnecessary price wars.
More importantly, the e-commerce market in Ali’s eyes is not limited to China. In the increasingly fierce competition of e-commerce, the break-up is a problem that every platform cannot escape. Ali has long been looking for growth in global trade, which is why Ma has been doing EWTP’s global e-commerce platform.
The change of Haitao’s pattern has not only affected Tmall International and Netease Koala. It is said that the competition with Ali to invest in Netease Koala has also had Jingdong, Tencent, and even the rising star to fight a lot. At the beginning of this year, the company launched a cross-border project called “Duoduo International”, officially entered the cross-border e-commerce, and cultivated the habit of users to purchase high-quality brand goods on the platform. It will officially launch “global purchase” this month. Channel, plans to recruit 500,000 overseas small and medium-sized businesses to settle in within 3 years.
In May of this year, a lot of merchandise classifications were adjusted, and the original international sector was off the assembly line, adding the “Hai Tao” classification. Therefore, there is a saying that Ali’s $2 billion purchase of Netease Koala is a “defensive acquisition”, preventing business extensions that show more signs. However, it is still doubtful whether the company that has just started to fight can quickly start the Haitao business.
Ali’s sniper war is not necessarily to fight a lot, but the factors of JD and Tencent are there. According to data from Ai Media Consulting, JD.com’s Haishu Global has a market share of 13.2% in cross-border trade in 2018, and only 12.3% of Vipshop International. In terms of genes, JD.com is obviously more threatening. After Tencent and Jingdong teamed up to invest in Vipshop, they formed a state in which the three united fronts and Ali.
The data shows that by 2020, the global cross-border online shopping spending will reach 1 trillion US dollars, an increase of nearly 50% compared to 2018. Ali, who is standing on the first echelon, will attack other stock markets sooner or later.
The bustling market has never lacked players, and the cross-border e-commerce attack and defense wars have become hot.