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Alibaba on a shopping spree

June 11, 2014

The operator of China's most popular shopping website, Alibaba, has expanded aggressively ahead of an initial public offering in the US that could put the company on par with industry heavyweights Amazon and eBay.


China's e-commerce giant Alibaba launched an American shopping website Wednesday and announced its third major acquisition in a week, in an effort to raise its global profile ahead of a widely anticipated listing in New York.

The online marketplace, called 11 Main, offers merchandise from over 1,000 vendors. It will help Alibaba secure its footing in an already crowded online retail landscape dominated by giants Amazon and eBay, but also contested by startups such as Etsy.

One way it plans to get a leg up over its competition is by charging half as much commission, or 3.5 percent, as the more established online venues.

"Of course we would love to be an everyday shopping destination," 11 Main's president, Mike Effle.

On a shopping spree

Alibaba, which holds over 90 percent of China's online market for consumer-to-consumer transactions, has also gone on its own shopping spree in the last week leading up to its initial public offering.

The company also said Wednesday it would buy the remaining third of UCWeb, a Chinese mobile software developer, in what Alibaba called the biggest corporate deal in China's Internet history.

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Alibaba did not publicize the value of the deal, but UCWeb's chief executive, Yu Yongfu, said it valued his company at more than $1.9 billion (1.4 billion euros). With its purchase, Alibaba hopes to win back mobile users that have migrated to competitors' platforms.

UCWeb boasts half a billion active quarterly users worldwide for its flagship browser.

More than just e-commerce

A day before announcing the deal with UCWeb, Alibaba revealed its intention to develop an entertainment platform in collaboration with the state-funded Shanghai Media Group.

That news came only a few days after the company paid $192 million for half the shares in China's top soccer club, Evergrande.

"The acquisitions made before the listing, all of these operations serve to endorse its overall business model and future development, so that the market will have faith in its business planning and recognize its valuation," said Zhuo Saijun, a market analyst in Beijing.

cjc/njz (AFP, dpa)