Alibaba And Ant Financial Drop Almost $1B On Online-To-Offline Venture

Online-to-offline, O2O, and same day (or in some cases same hour) deliveries are the next big battles in the war for eCommerce domination – putting it right in the wheelhouse for Alibaba (and subsidiary business Ant Financial).

And Alibaba and Ant — the maker of Alipay, Alibaba’s massive mobile payments platform — are betting big and jointly investing an almost $1 billion in a joint venture called Koubei.

What is Koubei?

Koubei is an expansion of Alibaba/Alipay’s mobile business that seek to blend the “real world” and “online” shopping experience into a single, fluid, commerce event – mainly by focusing on restaurants and brick-and-mortar stores. On the platform, Ant Financial will provide merchants with tools.

O2O is a natural expansion of Alibaba’s mobile business, as it works to navigate the switch to a digital commerce environment dominated not by computers but by devices. O2O services allow Alibaba to capture the attention of shoppers wherever they are, whenever they are shopping. An Alibaba customer in a brick-and-mortar shop can look to the Alibaba’s app discounts and promotions, use their Alipay Wallets for purchases, or order goods from local stores for delivery.

This is one of a series of O2O investments out of China’s eCommerce power player of late – Alibaba has also sprinkled funds onto Israeli QR code developer Visualead and department store operator Intime. It has also developed its in-nation logistics across China to power next-day deliveries.

Koubei, however, is its biggest and most expensive attempt to move in on local commerce with hyper-quick delivery.

Taodiandian, Alibaba’s restaurant delivery business, and several of Ant Financial’s services for offline merchants — including vending machines and tools for healthcare retailers — will be folded into Koubei.

Samuel Fan, Koubei’s new chief executive officer, said in a press statement that “consolidating our resources under Koubei allows us to capture opportunities that navigate both the offline and online markets.

To check out what else is HOT in the world of payments, click here.


Latest Insights: 

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