NetEase to spend RM 46.6b for e-commerce unit

By BLOOMBERG

BEIJING • NetEase Inc, China’s second-largest video game publisher, is deepening a push into e-commerce with plans to increase spending on products from the US, Europe and Japan to sell to local consumers.

The company’s Kaola e-commerce business will buy about US$11 billion (RM46.64 billion) of inventory over the next three years from the US, Europe and Japan to woo customers with everything from Dutch baby formula to Japanese cosmetics, Kaola CEO Zhang Lei said in an interview. The number will probably be higher after factoring in purchases from Australia and South Korea.

Best known for games, including bringing global title Overwatch to the Chinese market, NetEase is bolstering growth by tapping into local demand for established international brands.

Overseas health supplements and cosmetics have gained favour in recent years among a populace unnerved by a rash of safety scares. While Alibaba Group Holding Ltd dominates e-commerce in the country by acting as a digital landlord to sellers, Kaola buys almost all its inventory directly from companies overseas, bypassing local distributors and middlemen to lower costs.

“This industry could be worth 500 billion yuan (RM320 billion) by about 2021,” Zhang said in an interview.

“This is a new race course — Kaola wants to be a major leader here and capture much of the market share from the existing leaders.”