How’s Alibaba going to fill it’s own shopping cart?
After taking top spot with the largest IPO in history (a neat US$25 billion), Alibaba (NYSE: BABA) has begun flexing it muscles through a series of acquisitions over the past 12 months. Last week the tech giant purchased 4.8 million Class A shares in Zulily (NASDAQ: ZU), bringing its total stake in the apparel company to 9.3% – the largest outside shareholding in Zulily.
In the wake of massive acquisitions by the already well-established tech players such as Facebook, Microsoft and Google, how will Alibaba shape its own acquisition strategy now that is has some financial room to operate? Investments to date have been a mixture of VC-like investments and more strategic acquisitions such as Chinese smartphone maker Meizu. But if the behaviors of Silicon Valley’s heavyweights are anything to go by, I’d keep a watchful eye on the Asian tech industry in the coming months.
The race is on to own, well, pretty much anything in the pursuit of total market dominance. Google has been throwing mountains of cash at an array of different industry acquisitions including Vision Factory, Softcard and Revolv – artificial intelligence, mobile payments and home automation respectively. While we are still in awe of the $19 billion bill Facebook footed for mobile messaging company, WhatsApp (and the slightly more palatable $2 billion for virtual reality company Oculus Rift). Even though big picture strategies may be difficult to guess at now, the trends are obvious – if you have the cash, buy buy buy.
Some of the fastest growing tech companies in Asia have been blossoming up from areas such as India, China and Malaysia. India overtook China in tech exits this year, and is now the only Asian country ranked in the top 5 for tech exits globally. Asian online gaming company IPOs made up over half of the global share last year, and Chinese classifieds site, Ganji, is set to have their IPO with a current valuation of just over $1 billion.
So as we pull out the popcorn and sit back to enjoy the next imminent round of Alibaba purchases, a quick look at some of its more prominent investments last year will show it is already a seasoned shopper:
- ChinaVision (majority stake for $804 million)
- Tango ($280 million – beefing up its own struggling app, Laiwang?)
- InTime Retail ($692 million)
- YouKu ($1.22 billion)