Friday, October 25, 2013

China's Alibaba expands U.S. reach with new investment group


China's Alibaba Group is poised to invest more in U.S. tech companies with the start of a new investment group that the e-commerce giant is setting up in San Francisco.


Alibaba is looking to back "innovative platforms, products, and ideas" that focus on e-commerce and new technologies with the investment group, the company said in an email Wednesday.


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The company recently invested in three U.S. tech companies, the latest being ShopRunner, an online retailer that competes against Amazon.com. Alibaba led a recent investment round for ShopRunner that raised $200 million.


Earlier in the year, the company also funded Quixey, a search engine for mobile apps, and Fanatics, a retailer of licensed sports merchandise.


The U.S. market and Silicon Valley have talent and expertise the Chinese e-commerce company wants to tap into, said Mark Natkin, managing director for Beijing-based Marbridge Consulting. At the same time, Alibaba has ambitions to become more international. Its investments in the United States could lay the groundwork for an eventual expansion into the country's market, Natkin added.


"It's often more effective, more cost efficient, to acquire a company that already has demonstrated success in the area you are trying to expand in," he said.


While not as well known in the United States, Alibaba reigns as the largest e-commerce company in its home market. The company established Tmall and Taobao, two of the country's most popular online retail sites.


In the United States, the company has a smaller presence with its wholesale supplier sites, Alibaba.com and AliExpress, which sells products to businesses and even consumers across the world.


Alibaba could also decide to list on a U.S. stock exchange, with an initial public offering some reports have estimated could value the company at over $100 billion.


Source: http://www.infoworld.com/d/the-industry-standard/chinas-alibaba-expands-us-reach-new-investment-group-229452
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