Alibaba’s local services joint venture Koubei has completed $1.1 billion equity financing by Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital.
China-based e-commerce titan Alibaba has said in its annual report that Koubei, its local services joint venture with Ant Financial, has completed $1.1 billion equity financing by Silver Lake, CDH Investments, Yunfeng Capital (which was co-founded by Alibaba founder Jack Ma) and Primavera Capital. Koubei is a discovery platform for the best deals in restaurants, gyms, bars, etc. Although reports about the funding had surfaced earlier, Alibaba is confirming it only now.
The report also stated that Alibaba – which had 393 million users in 2015 – now has 493 million users. Its competitor Taobao now has 443 million users. According to this report, Alibaba generated $10.5 billion in payment volume transacted through Alipay during the December quarter, representing a 52 percent increase over the preceding quarter. In 2016, Alibaba generated $2.5 billion net income from total revenues of $7.7 billion – with e-commerce contributing about 87 percent and tech services the rest.
Koubei, jointly launched in 2015 by Alibaba and Alipay, lets its users access its platform on its app. It competes with Tencent-backed WeChat and Dianping. WeChat has expanded beyond being a messaging app and is not active in fintech and e-commerce. Alibaba and Ant Financial have invested in a similar platform called Ele.me, expected to work with Koubei.
With the recent partnership with the International Olympic Committee for e-commerce and digitisation, Alibaba has attracted global attention. With more funding coming in, Alibaba is being closely watched by India’s e-commerce sector too. Its investment in online marketplaces Snapdeal and Paytm has fuelled talks of the Chinese giant’s impending entry in India. There were even rumours of Alibaba buying Snapdeal for $2 billion, but those have been denied.
In terms of scale, none of the e-commerce players in India come anywhere near Alibaba in China. Founded by Jack Ma in 1999, Alibaba has, in fact, become a role model for success in e-commerce. India’s current e-commerce market leader Flipkart, racing against Amazon India which its billions in funding, claims to have 100 million customers – a small number compared to Alibaba’s but a substantial one considering the overall population and internet penetration in India. But the market and consumer behaviour is also strikingly different in both countries. Koubei’s Indian counterparts – platforms like Crownit – are yet to gain attention. Although India has a tendency to imitate China and the US markets, a deal discovery platform is yet to make a mark here.