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Alibaba to Spend Big, Centralize
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Chinese firm Alibaba.com Corp will invest 10 billion yuan (US$1.3 billion) in the next three to five years to integrate sectors linked to e-commerce.

The big-picture plan is to come up with a complete industry chain, such as facilitating small companies' overseas sales, according to Alibaba.com senior executives.

The money will be invested not only to strengthen its own muscle, which covers online auctions, business-to-business (B2B) trader matching and online payment, but also in external projects like logistics to improve the e-commerce infrastructure and support the industry.

Company officials wouldn't say whether it means acquisitions to expand the portfolio of Alibaba, which is already China's largest e-commerce firm.

"In the next few years we will be devoted to the industry's development to build a favorable environment and 'an ecological chain' to go with it," Jack Ma, founder and chief executive officer of Alibaba, told Internet businessmen summoned from around the nation to its annual Alifest conference over the weekend.

Ma said the money will be used for big reforms of the e-commerce industry chain, which the government "still hasn't any budget for" due to more important businesses to attend to at this stage.

Tao Ran, a spokesman for Hangzhou, Zhejiang Province-based Alibaba, explained yesterday that the investment is for the overall industry, with their own businesses part of it, but refused to clarify.

Alibaba has teamed up with banks in China to offer the online payment service, Alipay.com, and worked with China Post to penetrate underdeveloped e-commerce regions like rural areas using its most extensive parcel-delivery and money-remittance network.

Wei Zhe, who is in charge of Alibaba's B2B business, said the group will continue its expansion outside the Chinese mainland, with the next steps to enter Taiwan and Japan. It has already set up a presence in Hong Kong.

The group now operates six business segments: Alibaba.com for B2B, Taobao.com for online auction, Alipay, China Yahoo that it took over in 2005, Alisoft for business software and recently Alimama.com, an online ad-trading platform that is still being tested.

Alibaba.com, its wholesale business arm, plans to raise up to US$1 billion in a Hong Kong listing this year.

Hong Kong media reported that it will hold a hearing for the listing with the Hong Kong Stock Exchange as early as Thursday, but company officials refused to comment.

(Shanghai Daily September 18, 2007)

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