Ali 2 Billion Acquisition Of Netease Koala Like Success Is Expected To Lead The Cross-Border Market.

In August 13th, according to the anonymous news of "media", NetEase koala was financing, including Alibaba and many other e-commerce platforms. Among them, Alibaba is expected to buy 2 billion yuan, the overall acquisition of NetEase koala. However, specific financing or acquisition targets have not yet been finalized.

For the first time, they asked NetEase koala and Alibaba for confirmation, both sides said they did not comment on the rumor. From public relations, no comment was made. There is no denying the fact that several parties have started negotiations on financing and takeover.

According to the information acquired by LatePost team after the "finance and economics", the negotiations between NetEase and Ali koala are coming to an end, and the price is expected to be in the billions of dollars. After the completion of the acquisition, Tmall international will merge with NetEase koala.

The news broke out, in fact, is not the first time NetEase koala issued financing news. As early as November 2017, "first finance" reported that NetEase koala was preparing an independent financing plan for independent IPO. In February of this year, the NetEase koala explicitly launched a merger offer to Amazon China, hoping to achieve a good cross-border merger with Amazon in China. Of course, there is no end to it.

In 2017, NetEase CFO Yang Zhaoxuan also expressed euphemistically on many occasions that the NetEase business remained open and welcomed strategic partners (especially at the commercial level). "When appropriate, we will consider introducing external strategic shareholders". Yang Zhaoxuan said.

Amazon also has other financing plans. We need to emphasize that the capital demand of koala, NetEase, does not come from the predicament of the business itself. Because NetEase koala development is not bad.

As the second electricity supplier platform of NetEase, it is also the only cross-border platform. NetEase koala started from the January 9, 2015 public survey, and solved the trust problem of consumers through direct business mode. And from the milk powder, diapers, cosmetics, these explosions just need categories, quickly occupied the cross-border import market senior users group.

In March 22nd this year, AI media advisory issued the "2018-2019 China cross border Electricity Market Research Report" report shows. In 2018, NetEase koala ranked first in the domestic cross border import market with 27.1% of the market share, ranking the first in three years. Tmall international ranks second in the market share of 24%, and sea hoarding ranks third in the global market share of 13.2%.

That is to say, once Ali's acquisition of NetEase koala is successful, it means that Ali will occupy more than half of China's cross-border import market and form a strong market leadership effect.

Over the past 8 years, the development of cross-border import electricity providers has basically ended the contention of a hundred schools of thought and entered the two strong contention. One is NetEase koala, the other is Tmall international.

Among them, Tmall international although the market share in the public report ranked second, but according to the advantages of Ali ecosystem, Tmall international user base should be higher. With the help of Ali's huge membership and the advantages of multi traffic entry, Tmall international can easily get a non cross-border member of Ali to go to Tmall international for a cross border order through many activities.

This advantage belongs to the ecological advantages that NetEase koala does not possess. But the advantage of NetEase koala is that through the focus on cross-border import business and the deep ploughing of mother and baby products, especially the platform endorsement of proprietary mode, it has made NetEase koala a very experienced and stable cross-border user group in the past 4 years. That is, among the Internet population, which belongs to the high net worth cross-border users, NetEase koala has been very successful screening and precipitation.

Today's online online trading market, Ali's acquisition of NetEase koala, has also proved to some extent that the competition for dividends across the Internet population has entered a very deep competition among different segments of customers.

In August 8th of this year, NetEase released its 2019 Q2 earnings report. The electricity supplier sector grew by 20.2% over the same period last year, becoming one of NetEase's well deserved pillar businesses. Last Thursday (August 8th), U.S. stocks opened, NetEase shares rose 10.3%.

At this point, NetEase koala sold out or financing news, from the market premium pricing strategy, it is very conducive to NetEase koala selling a satisfactory high price.

Judging from the current environment of the first and two tier markets, the threshold and difficulty of the entire financing market have become unprecedentedly difficult. NetEase koala also needs long-term cash in return business. NetEase can choose to shrink the overall business boundaries and sell high-quality cross-border development business.

Because NetEase is still a Internet Co based game industry. NetEase koala entered the cross-border market late, and adopted the industry's "heaviest" proprietary mode. We should lock in overseas sources with large scale, and use bonded warehouse mode to clear customs, so as to lower price margins and wage price wars.

NetEase koala needs huge amounts of money.

On the other hand, the offline layout of NetEase koala is also the most radical in the cross sea platform. At present, NetEase koala has opened 8 "NetEase koala" outlets in Hangzhou, Shanghai, Zhengzhou, Chongqing, Chengdu, Tangshan and other cities. It is just over half of 15 from this year's target. Moreover, NetEase koala global factory store, following its first store in Hangzhou, is also known to enter cities such as Guangzhou, Nanjing, Chengdu and Xuzhou.

It can be seen that in order to open up a weak gap with Tmall international, the cost of NetEase koala investment is very heavy. Instead of continuing to invest in invisible bottomless holes, it is better to sell them directly during the high price period. I believe this reverse operation thinking is also consistent with the overall consideration of NetEase.

In the NetEase koala, the current news about the overall sale of koala, team transfer and layoffs has spread all over the pulse platform.

Moreover, despite the bright news of NetEase's Q2 earnings this year, the gross profit margin and the year-on-year growth of the electricity supplier business are mainly from the increase in sales volume of koala and strict selection, as well as the improvement of procurement and operation efficiency. From a growth rate, this is the seventh consecutive quarterly decline. From the three quarter of 2018 to the two quarter of 2019, the growth rate of NetEase's electricity providers increased by 67.2%, 44%, 28% and 20% respectively.

It is worth noting that Ding Lei had put forward the changing needs to adapt to the diversification of consumer demand in the Internet Conference in 2017. However, the implementation of NetEase koala's diversification strategy is not thorough.

From the perspective of supply chain competitiveness, the majority of the brands signed by NetEase koala in 2019, except for a few cosmetic brands, are mostly maternal and child products. Apart from the expansion of NetEase koala category, it seems that NetEase is also intending to strengthen the category advantages of mother and child cross-border e-commerce.

This advantage is exactly what Tmall international is better at in the field of cosmetics and health products. The value of mother and baby products such as long tail products is also the target value group that Tmall needs urgently.

In March 2019, Tmall international officially upgraded to the import department of Ali at the launch conference of the first fair. It announced that it would continue to increase investment and achieve import coverage in over 120 countries and regions in 5 years, and that commodities should be expanded from 4000 categories to 8000 categories.

In order to deal with Ali's continuous investment, NetEase koala needs additional investment, but this will naturally pull the business cost of the college entrance examination.

Giving up cross-border electricity providers is no easy task for NetEase, but it is not necessarily a good thing.

If Ali can successfully acquire NetEase koala, Tmall international will basically end its competition in the entire domestic cross border market, and enter the stable stage of deep value operation at the same time.

On the other hand, if laissez faire is successful in acquiring NetEase koala, Ali is also equal to the future development trend of cross-border import business, and virtually sets up an opponent. For many companies, the successful acquisition of NetEase koala will also enable the new e-commerce platform, which is growing rapidly in terms of the number of users and turnover of the entire network.

Ali and many spells, coincide with the selling period of NetEase koala, and again stand on a stage of competition.