Alibaba’s digital payments arm, Ant Financial, is buying US-based MoneyGram for $880 million.
MoneyGram has about 350,000 outlets in nearly 200 countries while Ant Financial has more than 630 million users.
The takeover will need regulatory approval from the US Committee on Foreign Investment.
The inter-agency committee reviews foreign acquisitions of domestic American assets on grounds of national security.
Ant Financial CEO Eric Jing said in a statement that the marriage of the two companies will “provide greater access, security and simplicity for people around the world to remit funds, especially in major economies such as the United States, China, India, Mexico and the Philippines”.
Ant Financial has a big market share in the online payments industry in China. The acquisition could help the company extend the lead as well as expand overseas, as competition is growing in China with rival Tencent’s WeChat payment system.
Moneygram’s shares rose by nearly 9% on the news. The takeover has been approved by MoneyGram’s board of directors.
Ant Financial’s shopping spree in the United States comes against a backdrop of rising tensions between China and the world’s biggest economy.
Before he took office, Donald Trump was questioning whether the US should continue its “One China” policy, sparking fury from Chinese state media. During his presidential campaign, he threatened to impose punitive tariffs on Chinese imports.
However, Jack Ma, the founder and chairman of Alibaba, held a meeting with Donald Trump in December 2016.
While Donald Trump has been critical of China, he said he had a “great meeting” with Jack Ma, who chose to float Alibaba on the NYSE. The share sale in September 2014 was a record-breaker, as the e-commerce giant raised $25 billion in its initial public offering.
If the MoneyGram deal goes through, it will be Alibaba’s second acquisition in the United States. In 2016, Alibaba purchased EyeVerify in a $70 million deal.
EyeVerify is a start-up based in Missouri, which uses biometric authentication technology for securing user’s online data and transactions.
Alibaba has broken its own record for sales on China’s Singles Day, the world’s biggest online shopping event.
The e-commerce giant said sales surpassed the record amount of $9.3 billion made last year in just over half the time.
Singles Day, also known as Double Eleven because it is held on November 11, has become a major annual event for Chinese retailers.
Alibaba said more than $1 billion was spent within eight minutes of midnight.
Within the first hour, Alibaba had made $3.9 billion in sales, almost double the amount spent in the same time period of the 2014 Singles Day.
In comparison, sales on Cyber Monday, which is the biggest online shopping day in the US, hit $1.35 billion, according to data analytics company ComScore.
Singles Day has grown tremendously since Alibaba began promoting it as a shopping day in 2009, and now includes many retailers such as rivals JD.com that stage sales promotions.
In 2015, Alibaba said there would be more than 40,000 merchants and 30,000 brands from 25 countries selling goods on its platforms.
More than 130 million users have already visited Alibaba’s marketplace app, Taobao, which exceeds the peak from 2014.
In the lead up to the event, Alibaba hosted a four-hour TV variety show featuring Chinese celebrities and Western entertainers such as Daniel Craig of James Bond fame.
Kevin Spacey appeared as his character President Frank Underwood from the Netflix series House of Cards to wish shoppers a “happy Singles’ Day” in a two minute video.
Alibaba CEO Daniel Zhang had said in a statement that the event would mean “the whole world will witness the power of Chinese consumption”.
He promised consumers “a new surprise every hour” over the 24-hour marathon, especially mobile users.
Alibaba said more than 27 million purchases came via mobile devices in the first hour.
Although its competitors offered attractive discounts, Fangting Sun, China-based analyst at market research firm Euromonitor International said that consumers’ attention was still focused on Alibaba’s online marketplace Tmall.com.
Alibaba accounts for more than 80% of China’s internet sales market.
It predicts that 1.7 million couriers, 400,000 vehicles and 200 planes will be making deliveries of products that range from electronics goods to cosmetics despite slowing growth in China.
Economists will be looking for clues about domestic consumption in Wednesday’s sales as China’s economy, the world’s second-biggest, heads for its slowest growth in nearly a quarter of a century.
Cheap Apple Watch copies are being advertised on Alibaba’s Taobao, China’s most popular online shopping service.
Taobao site lists devices branded the AW08 and the iWatch.
They both feature “digital crown” dials on their sides, similar-styled straps and identical user interface graphics to Apple’s forthcoming wearable.
However, their listings reveal they run on Google’s Android platform rather than Apple’s Watch OS.
Taboao acts as a showcase for third-party sellers – much like eBay and Amazon’s Marketplace service – and some vendors have taken pains to make clear that the devices they are selling are not Apple’s own technology.
The copycats first came to light in January, when a reporter from the news site Mashable discovered one being displayed at the Consumer Electronics Show (CES) in Las Vegas.
Other giveaways that the watches are not the iPhone’s official “companion” include:
They are being offered for about 258 yuan ($40) – a fraction of the 2,588 yuan that Apple will charge for its smartwatch in China when it goes on sale next month
They do not feature the same heart-monitoring sensors on their rear – although this is not always made clear
They boast longer battery life [youtube p1X8Vc5pfoU 650]
Alibaba has sold $2 billion of goods in the first hour of China’s annual Singles’ Day (Guanggun Jie).
That compares with $3.1 billion in sales seen in the first half of last year’s event.
Singles’ Day is celebrated each year on November 11 (11/11). The date is chosen for the connection between singles and the number “1”. In recognition of the day, young singles organize parties and Karaoke to meet new friends or try their fortunes.
Singles’ Day is considered the world’s biggest online retail sales day. It compares with Cyber Monday in the US – the day after Thanksgiving also marketed as a big online shopping day.
Alibaba said it expected to break sales records during the annual event, offering big discounts to boost sales.
Singles’ Day is considered the world’s biggest online retail sales day
“I bet the number [of goods bought] is going to be scary,” said Alibaba’s executive chairman Jack Ma last week. He estimated that 200 million packages would be shipped from orders made during the day.
Last year, Alibaba shipped more than 150 million packages worth about $5.75 billion in gross merchandise volume.
Before midday on November 11, sales had already hit $4.9 billion, Jack Ma told official state broadcaster CCTV.
Singles’ Day in China was adopted by Alibaba in 2009 to boost sales, but dates back to at least 1993, when students at Nanjing University are believed to have chosen the date as an anti-Valentine’s Day where single people could buy things for themselves.
Since then, it has gone on to become a massive day of sales for China’s fast growing e-commerce market.
The market is expected to grow at an annual rate of 25% over the next few years, from $390 billion in 2014 to $718 billion in 2017, according to a recent study released by management consulting firm AT Kearney.
Alibaba shares have been priced at $68, the top end of the range, in a sign of strong investor appetite for the Chinese e-commerce giant.
With trading starting on the New York Stock Exchange later on Friday, September 19, the share sale will raise $21.8 billion, making it one of the largest flotations ever.
It values Alibaba, which accounts for 80% of all online retail sales in China, at $167.6 billion.
That value surpasses such corporate titans as Walt Disney and Boeing.
The final amount raised from the sale could change, depending on the final allotment allocation. If underwriters exercise an option to sell more shares, the money raised could increase to $25 billion, beating the record listing held by Agricultural Bank of China. That flotation in 2010 raised $22 billion.
Alibaba operates a series of online marketplaces in China and elsewhere, handling more transactions than Amazon and eBay combined.
The company was formed 15 years ago by former teacher Jack Ma, who wants to use some of the proceeds to expand in the US and other markets.
Alibaba shares have been priced at $68 ahead of NYSE flotation
Trading in Alibaba shares is expected to be frenetic in the early hours after the market opens. Many experts expect the share price to go higher once trading begins as institutions add Alibaba stock to their investment portfolios.
US search giant Yahoo, already a shareholder in Alibaba, is selling some $8 billion worth of its holding in the offering, leaving it with about 16% of the company.
Japan’s Softbank is not selling for now and will be left with a 32% stake, making it the largest single shareholder.
However, control will remain in the hands of Jack Ma and other company veterans. A group of 27 manager dubbed the “Alibaba Partnership” will have the power to nominate a majority of board members.
Regulators at the Hong Kong stock market objected to this structure, which resulted in Alibaba deciding to list in New York.
Alibaba says the arrangement will help it to preserve its innovative culture.
Jack Ma’s stake is reportedly worth about $14 billion, while the sale is expected to make millionaires out of a large number of the company’s managers, software engineers and other staff.
Alibaba acts as an online marketplace for wholesalers, retailers, and small businesses, and handles e-payments and financial transactions. The company has also branched out into cloud computing and instant messaging.
Alibaba has about 279 million active buyers visiting its sites at least once a month.
Online spending by Chinese shoppers is forecast soar over the next few years. And Alibaba has plans to expand into emerging markets as well as Europe and the US.
Alibaba made a profit of almost $2 billion in Q2 2014, with sales up by 46% year-on-year to $2.54 billion.
China’s biggest e-commerce group Alibaba has bought an 18% stake in Weibo, China’s largest Twitter-like service, as it looks to tap into the fast-growing social media sector.
Alibaba will pay $586 million for the stake, valuing Weibo at over $3.2 billion.
The deal is expected to help Alibaba drive traffic from Weibo, which has more than 500 million users, to its e-commerce sites such as Taobao.
It will also help generate additional advertising revenue for Weibo.
According to the two firms, the partnership will bring in $380 million more in advertising and social commerce services revenue for Weibo over the next three years.
China’s biggest e-commerce group Alibaba has bought an 18 percent stake in Weibo, China’s largest Twitter-like service
“We believe that this strategic alliance helps to create a stronger Weibo,” said Jack Ma, chairman of Alibaba.
“It affirms our view of the vitality and importance of social media in unleashing value in e-commerce activities.”
China has become the world’s biggest internet market and it is expected to grow even further in the coming years as more people get access to the internet.
Alibaba, was one of the early pioneers in the sector in China and has benefited from this boom.
It offers various services, including Alibaba.com which connects businesses across the globe to Chinese manufacturers. It also runs online shopping sites for retail consumers in China as well as an online payment service Alipay.
Driven by its success, the firm has been looking to increase its dominance in the Chinese market.
Meanwhile, social media sites such as Weibo have seen tremendous growth in China in recent times and have become a powerful medium for consumers.
The two companies said their partnership will help them grow their respective businesses and that they will “cooperate in the areas of user account connectivity, data exchange, online payment and online marketing, among other things”.
“Weibo and Alibaba’s e-commerce platforms are natural partners,” said Charles Chao, chairman SINA, the parent firm of Weibo.
“Together we provide a unique proposition not only to existing online merchants, but also to individuals or businesses, who wish to offer products and services on social networking platform to take advantage of the traffic shift toward social and mobile internet.”
According to the deal, Alibaba will have the right to increase its ownership in Weibo to 30% at a mutually agreed valuation “within a certain period of time in the future”.
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