With yet another investment Alibaba is in news again. Sources revealed that Alibaba, the leading ecommerce giant in China, plans to invest $200 million in the American photo messaging site Snapchat. The Alibaba Snapchat investment if successful, would give Alibaba a firmer foothold in the internet world.
Alibaba’s IPO was one of the largest in America. However, though Alibaba dominates the Chinese e-commerce market, it has repeatedly failed to make a mark in the social messaging field.
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Snapchat, the social photo messaging app has a great market in the US and few other European counties with nearly 100million active users each day. However it has failed to make a mark on the other parts especially the Asian market. With the Alibaba Snapchat investment, the photo messaging site aims to take a new turn.
Why Alibaba is trying so hard?
However, the sudden interest of Alibaba in the social messaging app has aroused curiosity. Alibaba, it seems is trying to enter the social forum as well. Currently, the Chinese social messaging market is dominated by Tencent’s WeChat. According to the latest records, WeChat has over 500million active users throughout the world.
Rival on the rise:
Alibaba’s rival Tencent has been monetizing greatly through WeChat. Alibaba Snapchat investment is mainly to challenge rival Tencent with the social photo messaging app. Alibaba has been trying to enter the messaging zone for quite some time in China. It has also launched its enterprise messaging app Dingtalk messaging services. However, it is too early to say anything on that.
Meanwhile, Tencent has already invested in JD.com, another ecommerce company in China. With this collaboration, Tencent now allows its users to shop directly from the JD.com section in their WeChat app. This if promoted correctly can turn to be a powerful concept. The strategies undertaken are perfect for monetization from the social app. With already a huge follower base in China, Tencent collaboration with JD.com might act as the beginning of something huge.
Alibaba Snapchat investment might be good for the Chinese ecommerce site to spread globally.
How SnapChat will help:
Alibaba Snapchat inventment is being counted as a refreshing venture for both the companies. However, Snapchat has many constraints that might put the collaboration in the backburner especially on Alibaba’s home ground China. Snapchat only allows users to share self-destructing images unlike WeChat.
Earlier Investment Stories:
Tencent had earlier invested in Snapchat, with the founder of the messaging app praising the business models followed by the WeChat messaging.
Alibaba had earlier invested in multiple US startups like Tango, Lyft and Quixey. However, these investments failed to create any significant mark for the ecommerce giant keeping it limited to just ecommerce and payments. For now it is to see whether Alibaba Snapchat investment is able to break the myth.