According to a report by LatePost on August 18, as of July 2022, Kaola, a cross-border e-commerce platform acquired by Alibaba nearly three years ago, has shrunk from more than 400 people in 2021 to less than 20 people. The platform is now focusing on member e-commerce business for mothers and babies, as well as beauty items. Products and technologies are now only being maintained and are no longer receiving upgrades.
The contraction reportedly began in early October last year. That month, the Smartphone Tmall Division and Kaola Division merged into the FC Division, or “Future Clients For Customer.” However, some employees soon understood that FC’s core mission is to open self-operated flagship stores of well-known brands on Tmall.
Since then, although the smartphone version of Tmall and Kaola have maintained independent operations, Kaola’s status has declined and its resources have been transferred to other departments within the FC Division.
In September 2019, Alibaba wholly acquired NetEase‘s cross-border e-commerce platform Kaola for $2 billion, marking the firm’s biggest acquisition in the e-commerce field at that time.
Kaola, which had been established for four years at that time, was the largest cross-border e-commerce platform in China. In 2018, Kaola’s GMV was close to 30 billion yuan ($4.4 billion). According to a research report by iiMedia, in the first half of 2019, Kaola ranked first with a market share of 27.7%.
However, Kaola failed to add a new business form to Alibaba. Its business scope is highly similar to Tmall International. An Alibaba insider concluded that Alibaba has many more e-commerce capabilities than NetEase, such as talent, e-commerce infrastructure, cross-border supply chain and bonded warehouse. Moreover, Kaola has never established a standardized supply chain audit standard and mechanism.
After the Spring Festival this year, an unconfirmed rumor circulated within Kaola team that the platform must break even before the end of September, otherwise they will be shut down. In May, Kaola began to lay off employees. The Kaola app is still running, but its products and technologies are no longer being upgraded. Its official Weibo account has not been updated since June 1.