“Jack Ma looks desperate right now,” says business analyst Shaun Rein at the BBC about the founder and chairman of the Alibaba Group. Alibaba has announced its IPO, but feels the breath of its major competitor Tencent coming from behind.
In an effort to stave off competition, Alibaba has attempted to launch new products, including WeChat competitor Laiwang in 2003, and acquire firms, including an 18% stake in Sina‘s Weibo – essentially China’s Twitter – which recently announced an initial public offering (IPO) share floatation of its own.
“I think Alibaba is running scared – as they’re about to IPO, it’s really damaging for them,” says Shaun Rein, managing director of the China Market Research Group.
“Jack Ma looks desperate right now.”
And Tencent hasn’t been intimidated by Alibaba’s big spends, as it has deep pockets of its own.
The firm recently bought a large stake in JD.com, the second-biggest e-commerce site in China behind Alibaba, for $215m.
Alibaba’s Tmall, which allows business to sell to consumers, has about a 50% market share, followed by JD.com with 19%, and Tencent’s own platform with 7%, according to research firm Analysys…
And the competition is just heating up. “In the next six to 10 months, you’re going to see a lot of consolidation in the mobile start-up space,” says Mr Rein.
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