Alibaba, Ali Fortune Acquires AGTech Holdings To Boost Lottery Business

Alibaba and its main financial affiliate spends $308 million to own nearly 60% of the AGTech Holdings to boost lottery businesses in China.

Reports published by Bloomberg suggest that Alibaba Group Holding, along with its financial affiliate, is willing to spend nearly $308 million (HK$ 2.39 billion) for its lottery business in China. Alibaba will be investing to have the control of AG Tech Holdings, which is listed in Hong Kong’s market but will help in boosting the lottery business of the company in its domestic market.

The main financial affiliate, which is majorly owned by the largest online retailer in China, is known as Ali Fortune Investment Holding. The deal suggests that the company has agreed to buy shares valued at HK$ 1.68 billion and convertible bonds valued at HK$ 712.6 million in AGTech Holding. According to its investment, Alibaba Group will have almost 59.45% ownership in the firm upon full conversion. This was confirmed by a regulatory filing to the Hong Kong Stock Exchange.

Recently, Alibaba asked numerous banks to raise an amount of up to $4 billion in order to fund its expansion plans. The firm is looking to expand in rural areas and improve its market status in international regions. It is currently focused to make an impact in the Indian market where it is directly taking on Amazon. However, it has not launched its own business in the foreign markets. It said to first create an image in the regions and then slowly expand for maximum results.

AGTech Holdings is already known for running lotteries in various provinces of China. With this acquisition, it seeks to further expand its game in the territory. This acquisition also means that Alibaba Group is returning to the profitable and moneymaking lottery businesses in China. Previously it was in this business but was forced to back out and stop operations because of severe restrictions imposed by the government.

AG Tech stated that it would expand its games, hardware, and distribution throughout China within the coming times. The company added that the lottery business of China had a participation rate of only 7.5% in 2013. It should be considered that this sector is strictly regulated as per the decision and restrictions of government. The Hong Kong’s lottery business participation rate in 2012 was 56%, which is impressive and showed signs of growth.

The leading e-commerce giant said that with its main financial affiliate, Alibaba Group will assist AG Tech with cloud computing.

Ali Fortune is a company majorly owned by Alibaba, which means that 60% of the main financial affiliate is with Alibaba Group whereas the remaining 40% is owned by Ant Financial, also known as Alipay’s operator ‘Zhejiang Ant Small & Micro Financial Services Group’.

Alibaba has been doing a tremendous business when it comes to e-commerce but its overall earnings and results were hurt because of its lottery business suspension. After a long time, it is all set to make it return in the business.  

Jack Ma Is A Smart Businessman Says Analysts

Analysts believe that Jack Ma is playing a smart move by putting in a bid for Hong Kong based newspaper.

It has been on going for quite a while now that the founder of the Chinese tech giant, Alibaba Group Holding, is looking to make its way in the print media business. Jack Ma seems interested in buying the South China Morning Post for a long time now however the deal is still in hanging as only interest has been confirmed from both companies. It is very well known that the Hong Kong based English newspaper is currently struggling in the market therefore analysts believe that Ma’s offer is the only way to save it from crashing down.

Jack Ma has planned to meet the buyout for the Hong Kong based newspaper in order to re launch it in a better way. Not only it will be beneficial for him or Alibaba Group but for the South China Morning Post as well. It is still unclear whether Jack Ma wants to acquire the newspaper company or Alibaba does.

The newspaper was known as one of the most biggest and famous back in the days. It was founded in 1903 and has ‘long given international readers an insider's perspective on Hong Kong and the mainland, providing a window on events from the Mao era to China's 1980s economic awakening and the 1997 handover,’ according to a source.

However it failed to keep up with the media industry and gradually subscribers, sales, and profits have evaporated. Furthermore, the company was hit by a massive downfall, industry wide, in terms of advertising revenues. Since then, South China Morning Post is unable to keep up with its standard business and the transformation phase to the digital age.

Jack Ma is very much interested and sources familiar to the matter state that the talks regarding this deal are in now an advanced phase. Mr. Ma would probably buy a stake in SCMP and several analsyts including Jackson Wong thinks that it is a clever move from the Chinese internet tycoon.

Jackson Wong adds, “He has tons of cash and he knows how to run a business in China very well. Links with Alibaba would also give the paper a necessary boost in terms of its online platform.”

Jack Ma indeed is a smart businessman. He realizes that at this moment, he has all the power to do anything in the Chinese tech sector. Therefore he along with his business, Alibaba, is trying to expand in further business categories as soon as possible. Apart from the e-commerce business, Alibaba’s Aliyun is known as the power house in cloud computing business.

Alibaba Adds Russian Merchants In Order To Expand

Alibaba decides to add Russian merchants and markets to boost its sales.

Alibaba is looking to expand its market as globally as possible due to the recent news of a decline in China’s economy soon. It is opening its market to Russian merchants in order to increase sales and has already added Russian shops, such as Wikimart and Incity to its marketplace, named AliExpress.

Alibaba group will launch this facility on November 11. It said in an email, according to Business of Fashion, the market would consist of Russian goods in its online stores. Russia’s locals now are using internet shopping more than ever and this is a great opportunity for the e-commerce company to launch Russian products to capture the wide market. It has not evidently missed the opportunity.

The online Chinese business has 22 million monthly users in Russia. Its international online market was previously worth $1 billion in the first half quarter according to data insight. The online shopping convenience is trending rapidly in Russia because of the attractive packages, sales, and prices. The platforms that are used the most in the country are Alibaba Express and JD.com among many others.

The act of collaborating with Russian merchants to increase its sales in this market is the best step that the company has taken. Online sales from China have already had an increase of 50% in the beginning of 2015 due to the weakening Russian currency and recession contributing to the decrease of the purchasing power of the locals; hence, they are now turning their faces towards the online easy and affordable online market.

The business development director of Alibabaexpress commented, “In choosing partners, we focused on categories of good that are in high demand in Russia, and highlighted Russian brands and companies that manufacture products in Russia.”

Alibaba is already expanding to Europe and has appointed employees specifically for those tasks in France, Italy, and Germany. The Single’s Day event, from which it profited last year, is ahead and since the never-ending expansion, this time it might be even bigger than expected.

Without doubt, the online market will get affected from China’s economy since it is investing such a huge sum of money in its expansion worldwide and is now focused on market outside its hometown and rural markets domestically. It should keep this in focus for now. Many other companies existing in China are also vulnerable to the economic fluctuation, which bothers investors as well.

Alibaba stock is selling at $71.76 today.

Alibaba Modifies Its Fake Goods Procedure

Alibaba revamps its strategy in an attempt to combat counterfeit goods.

Alibaba Group Holding is the largest B2B business in the world. The Chinese e-commerce giant has been the center of attention recently where it was accused of counterfeiting goods on its online marketplaces more than once. The latest accusation was made by the luxury brands that were concerned about their products.

However, the online retailer came ahead and mentioned the safety measure in order to combat the counterfeiting goods issue, but it is recently facing immense criticism that it is not doing enough to battle counterfeit. Hence, it has revamped its strategies to do it.

According to Wall Street Journal, Alibaba Group revamped its strategies completely in order to remove problematic listings from its famous online marketplaces. “Under the new rules, global brands that have been highly accurate in flagging fake goods on Alibaba’s Tmall and Taobao will have their complaints reviewed in one to three working days, compared with five to seven days previously”, reports Wall Street Journal.

Furthermore, the company says that all the global brands that will be signing up for this program will also have a representative that will help in reviewing and dealing with their complaints regarding counterfeits.

The new latest program of the company is named as ‘good faith takedown’. It has declined to disclose any details regarding how many brands and their names have signed up for this program. The good faith takedown was effective from April 1.

The corporate giant believes that the steps that it has been taking are only to enhance and refine its anti-counterfeiting operations in the online marketplaces; specifically Tmall and Taobao. A few experts and professionals have agreed to it and welcomed this program, but the others are not in favor, as they feel that this will make the process of filing complaints more complicated.

This is not a new problem for Alibaba. For a very long time, the company is facing problems regarding counterfeited goods and numerous accusations regarding it as well. The Wall Street Journal adds, “Although public scrutiny has increased since the company raised $25 billion from global investors last September in the world’s largest initial public offering.”

Alibaba is the largest company in China, which is also tapping the United States market lately in order to expand its business. In the overseas market, it has not yet made a staunch mark but it wants to bolster its international presence in the world’s largest economy.

Apart from making a new book of rules and regulations, the company is promoting and fostering local brands as well.

Alibaba founder, Jack Ma, is the richest person in China

 Forbes names Alibaba founder Jack Ma richest person in China and for that matters, Alibaba is also the world’s largest B2B business currently. Jack Ma’s company has clearly shown skyrocketing performances in terms of raising profits and revenues on big margins. When Forbes announced, it was the first time that Jack Ma topped the list of Forbes annual ranking of China’s richest person. BBC reports “The founder of e-commerce giant Alibaba, Jack Ma, is China's richest person with a fortune of $19.5bn (£12bn), Forbes Media said. Mr. Ma's wealth more than doubled from last year's $7.1bn after his company's record-setting share sale in September.”

Forbes list showed that Entertainment firm Wanda's chief executive Wang Jianlin was knocked out of first place into fourth as the founder of Alibaba took over. Moreover, the number of billionaires in the country rose up to 242 in 2014 when compared to last year’s 168. Forbes said “Mr. Ma, a former English teacher, started the company 15 years ago. Alibaba is now valued at more than $240bn. It is seen as an industry leader commanding more than 80% of China's significant online e-commerce market. Earlier this year Mr. Ma also topped another rich list, China-based Hurun, which put his wealth at a much higher $25bn.” 

Baidu’s owner, Robin Li who is known as an inventor of China’s Google was ranked second in the list with an estimated net worth of $14.7bn, up from $11.1bn the year before. Ma Huateng, also known as Pony Ma, of Tencent, China's biggest online firm, held third position. The company is the parent of the most popular messaging app in China WeChat.