Research On The Cross-Border Merger And Acquisitions Development Of Alibaba

Under the background of national BRI global economy,Chinese commercial enterprises also start to go abroad and enter the international e-commerce market.China's e-commerce industry is becoming more and more important in the world e-commerce market,among which the transaction volume in 2017 nearly doubled than of 2014(growth from 3.9 trillion yuan to 7.5 trillion yuan),and much of the explosive growth has been driven by the global expansion of Chinese e-commerce companies.With the rapid development of this field,there are many new operating modes of Internet enterprises emerge,but also create a lot of new problems related to mergers and acquisitions in the Internet industry.After summarizing the literature of relevant scholars in China and abroad,I find that in foreign countries,due to the early start,their theoretical system and achievements related to cross-border M&A are more complete,and their research scope is more extensive.China's research is mainly focus on the exploration of the impact of M&A motivation,the risk prevention of M&A,and the performance of transnational M&A.However,in both China and foreign countries,there are few literatures that combine the theories of overseas mergers and acquisitions of e-commerce enterprises with the actual case studies.Most of them are derived studies based on the theories of overseas mergers and acquisitions.Therefore,this paper takes Alibaba's acquisition of LAZADA as the entry point,explore the Southeast Asia market by combining theory and case study of this field,and make analysis about the motivation,the risk and prevention and the financial performance of Alibaba Group's acquisition of LAZADA,in order to make this paper more practical and give more experience about this aspect for those related companies to refer to it.In my paper,I divided the types of cross-border M&A into three aspects,which is horizontal M&A,vertical M&A and conglomerate M&A.The type of Alibaba's acquisitions of LAZADA Company is a type of horizontal M&A because they are both e-commerce companies.The meaning of horizontal M&A can be explained as "Both M&A and acquired parties,respectively belong to two or more different countries,but producing or selling similar or the same products,that is called horizontal cross-border mergers and acquisitions".In April 2016,Alibaba Group acquired 51%of LAZADA's stock equity with a 1 billion US dollar capital injection.A year later,in Alibaba's fiscal year of 2017,the revenue of Alibaba's international commerce retail business in Alibaba group surged from 22.04 billion yuan to 73.36 billion yuan,accounting for 4.64 percent of the total revenue,increased 232.85 percent year-on-year.The creation of this performance is mainly due to the operating income of LAZADA in the Southeast Asian e-commerce market.In June 2017 and March 2018,Alibaba respectively invested another 1 billion US dollar and 2 billion US dollar.Their huge amount of investments also get back with an explosive gro.wth.We can see it from Alibaba's financial report in fiscal year 2018,the international commerce retail business revenue slightly growth to 142.16 billion yuan from 73.36 billion yuan,accounting for 5.68%of Alibaba's total revenue,year-on-year growth of 93.78%.In the analysis part,I will integrate and give a briefly analysis about the case of Alibaba group's acquisitions of LAZADA in three dimensions,which are:the motivation,the risk plus its prevention and the financial performance.This is to know the reasonability and the logicality of this acquisitions,in order to find out what are the pros and cons of this strategy made,trying to find out a better strategies combination and the solution of problems,which allows Internet companies to have a better understanding of cross-border mergers and acquisitions,and to give related companies more experience to refer to it.