Acquisition is second tech buy for e-commerce giant in 2 months

China's largest e-commerce company, Alibaba.com Ltd, has made its second acquisition of a California tech company in two months, making it one of the most ambitious Internet companies in China.

The company said on Wednesday that it has entered into an agreement to buy Auctiva, a Chico-based company that provides listing tools for vendors on auction site eBay. The move is part of the company's strategy to further expand its footprint in the US market.

The Hangzhou-based company made its first US acquisition in June via the purchase of Vendio Services Inc, which offers e-commerce services similar to Alibaba in the US.

Chief Executive Officer David Wei said more acquisitions will be included in the company's global strategic expansion.

He said that the US, which is the biggest market for the company outside of China, is the top priority for Alibaba's investments.

"There are a number of deals in the pipeline both inside and outside China," said Wei, according to a Reuters report.

Duncan Clark, president of Beijing-based research firm BDA China Ltd, said Chinese Internet companies such as Alibaba have been taking the initiative in the world's Internet arena.

"Alibaba is well capitalized and it's never short of ambition," he said. "It is one of the first Chinese Internet firms to think internationally."

There will be more overseas acquisitions from Chinese Internet firms in the coming years, but it will still take time for them to become serious challengers in the US markets, he added.

Alibaba's acquisition of Auctiva, which closed on Aug 18 for an undisclosed amount, is part of a $100 million investment plan it has set aside for AliExpress, a wholesale transaction platform targeted at international small businesses. AliExpress is a key step in Alibaba's expansion in overseas markets.

"Our mission is to connect small businesses with suppliers overseas to make global purchases possible," said Wei.

The two acquisitions - Vendio Services Inc and Auctiva - may create 250,000 new customers for Alibaba and boost its team of employees in the US, according to a company statement.

Auctiva will operate as a new business unit and retain its own brand.

Media reported earlier this month that Alibaba is seeking to become a minority shareholder in Shenzhen One Touch Business Services Co Ltd, a Chinese provider of foreign trade services. The company refused to comment on it.

China Daily

(China Daily 08/26/2010 page16)