NetEase Invests Heavily in China’s E-Commerce Market

Seeking strong growth catalysts, Chinese web portal NetEase is doubling down on e-commerce in its native country.

The company announced earlier this week that its revenue is growing thanks to investments in e-commerce, as the company attempts to challenge Alibaba’s dominance in the space.

NetEase has solidified a multi-billion dollar business with its web portal and online gaming services (NetEase operates World of Warcraft in China), but both businesses are at risk of disruption from the shift to the mobile internet, which has become the most popular way to connect to the internet in the country.

To diversify and prepare itself for the rising tide of Chinese online shopping, NetEase announced its cross-platform commerce site Kaola.com, has seen revenues rise over 300% alongside its email and other services.

The growth is impressive, but the platform remains small. In the last quarter, NetEase’s e-commerce and other services saw only $61.4 million in revenue, compared to $558 million for the company’s overall operations.

The growth is promising, but it’s early—and competition is fierce. Alongside Taobao and Tmall, Alibaba has recently worked to build a bank, create a credit score system, partner with Apple Pay, and create its own mobile payments platform. Plus, Alibaba is expanding its Tmall platform to become a worldwide behemoth. In the fight for Chinese e-commerce dominance, NetEase has a tough climb ahead.