Amazon’s acquisition of Alibaba’s e-shopping business could help its e‑commerce competitors like Amazon, but could also be bad news for the e-trade industry, which relies heavily on Amazon for online shopping.
The deal, which has been expected for months, is expected to close next month and will see Alibaba acquire e-traders in the United States, Canada, Britain, France, Germany, Italy and Spain.
The combined companies could create more than 50,000 jobs, according to a Wall Street Journal report, and would be expected to take a big bite out of Amazon’s e‑tailer business.
“We’re going to have a lot of competition for our services, for the people we’re shipping to, and it’s going to be a real challenge for us to compete with Amazon,” said Peter Gartenberg, Alibaba’s CEO, according an interview with Recode’s Kara Swisher.
Alibaba’s focus on e-retailers has been under attack from competitors, who argue that it’s unfair that Amazon has more market share than it does.
But in a recent interview with Bloomberg, Alibaba CEO Jack Ma said that the deal with Amazon would be a “game changer.”
Alibaba, a company founded in 2006 by former Alibaba executives who are known as the Ma brothers, already owns online retailers like Taobao and Zappos.
Its biggest competitor is Amazon, which already has a strong presence in e-tailing.
The e-shop giant is already a $3.2 billion marketer and has a growing e-business, which now includes e-books, games, movies and other e-products.
In December, Alibaba said it had sold a $5.6 billion stake in its ecommerce business to Japanese e-fintech company Rakuten.