Top Chinese e-commerce firm Alibaba.com, plans to buy Vendio Services Inc, making its first major US acquisition to further its strategy of expanding its global footprint.
The fast-growing Web operator founded by outspoken entrepreneur and former schoolteacher Jack Ma, has been trying to make further inroads into the United States and India.
Vendio offers the same Internet business services in the United States as Alibaba, which connects millions of buyers and sellers around the world. Alibaba.com is the listed unit of the Alibaba Group, of which Yahoo owns nearly 40 percent.
The start-up already hosts services for 80,000 small US businesses, which can now link into Alibaba's network of buyers and suppliers.
"From the Vendio Platform, merchants can source products from Alibaba.com's trusted supplier network and sell through channels such as eBay, Amazon, and their own Vendio-supported store," the company said in a statement. Terms of the deal were not disclosed.
Web commerce in China has surged as buyers tap the Internet for better deals from more suppliers in the nation's highly fragmented distribution networks.
In its first quarter, Alibaba reported its best results in a year on strong paid-customer growth, and predicted increased use of its value-added services for the year.
Alibaba.com, backed by billionaire investor George Soros, competes with Global Sources in China's 1.5 billion yuan business-to-business (B2B) marketplace industry.
The company is also challenging US sites eBay Inc and Amazon.com Inc for international online buyers and sellers after dominating the e-commerce market in China. Chief Executive Officer David Wei aims to boost overseas revenue to a third of Alibaba's total, from about 2 percent, he said last year.
"This acquisition will help Alibaba's overseas expansion," said Tsz Wang Tam, who rates the company's shares "buy" at Kim Eng Securities HK Ltd in Hong Kong. "The company will still derive most of its sales from China, because that part of the business is still growing strong."
The transaction is expected to be completed next month, Alibaba said. Mike Effle, chief operating officer of San Mateo, California-based Vendio, will become chief executive officer of the business, while Vendio CEO Rodrigo Sales will be a strategic adviser, Alibaba said.
'New Channel'
The acquisition is part of a $100 million investment plan announced in April for Alibaba's AliExpress, the Chinese company said. AliExpress is an e-commerce site targeted at international buyers.
"We now have a new channel giving our China and Asia-based customers access to the US market," Wei said in an interview yesterday. "At the same time, merchants in the US have exclusive access to wholesale sources that are part of the Alibaba network."
Alibaba's goal is to improve Vendio merchants' profit margin by 30 percent to 50 percent, "as quickly as possible," he said.
Alibaba shares closed up 1 percent at HK$16.34 in Hong Kong.
