E-Commerce Giant Alibaba Group Holding Ltd (NYSE:BABA) Acquires A Stake in Zulily Inc (NASDAQ:ZU)

Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA)‘s intentions to rule American retail market are not hidden from anyone; its recent move confirms the same once again. As per the reports, Alibaba has acquired over 9% stake in U.S. e-commerce player Zulily Inc (NASDAQ:ZU).

Road So Far:

Alibaba didn’t make an official announcement about this acquisition. It came to light only through a recent security filing. The stake is valued at more than $150 million. Reports claim that Alibaba spent $56 million in the previous week for buying a stake in Zulily. The quarter ending March 31 wasn’t as good for the U.S. retailer as it expected. It announced earnings reports for the previous quarter lately. Company’s stocks dropped significantly after this announcement was made. Alibaba didn’t waste any time and bought 9% stake in the company as soon as its prices came down in the stock market.

Nobody knew if Alibaba owned the shares of Zulily before this transaction. The American retail player is mostly into clothing and quite a few other merchandise with a complete focus on moms. The company is known for offering deep discounts in the flesh sales activities that come up with a pre-decided time limit. A person close to this matter revealed that the Chinese e-commerce giant didn’t have any plans to buy 100% stake in Zulily, at least in the near future.

The management of the U.S. retail website is delighted to receive this proposal and hopes that it will enhance the brand value of the company in the future. According to Darrell Cavens, Chief Executive Officer, Zulily, Alibaba Group Holding Ltd (NYSE:BABA) has been one of the most prestigious shareholders for the company. It’s great to see that it has decided to buy a reasonable stake in Zulily at this point. Zulily had a lot of respect for Alibaba and didn’t have any problem with its intentions to buy 9% stake in the company.

About the Author

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.

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