Bloomberg
Beijing


Alibaba Group Holding vice chairman Joseph Tsai will head up the board at Koubei, underscoring the strategic importance of a new business unit that will spearhead the e-commerce company’s drive into the local services market.
Tsai’s new responsibilities as Koubei’s chairman come on top of his current role as the number two executive at Alibaba, the company said in an email confirming his appointment yesterday.
Alibaba executives have stressed the importance of establishing a foothold beyond e-commerce in what they call an “online to offline” market, which refers to the increasing use of mobile devices to buy physical goods and services. Tsai joined Alibaba in 1999 after working as a lawyer at Sullivan & Cromwell. He helped transform Alibaba into a global powerhouse, leading negotiations on dozens of acquisitions and early financing rounds, including with SoftBank Corp.  Koubei, a joint venture set up by Alibaba and its financial services affiliate, is competing with Baidu Corp and Tencent Holdings in a market for local services that’s expected to reach 7.28tn yuan ($1.17tn) by 2017.
Alibaba and Zhejiang Ant Small & Micro Financial Services Group agreed in June to each invest 3bn yuan to help the company expand into neighbourhood services. The company has not spelled out its plans apart from an initial focus on food and beverage.Ant Financial’s Samuel Fan will become Koubei’s chief executive officer, overseeing its daily operations, according to a June 23 statement distributed on Businesswire.
Local services is a key area of contention for Chinese Internet companies as people turn to the web to order take-out, beauty treatments and domestic helpers. Chinese users of location-based services could rise 29% to 400mn people in 2017 compared with this year, according to a research report by Shanghai-based Internet consultant IResearch.
Baidu said in June it would invest 20bn yuan in three years to expand its own location-based services platform, called Nuomi.