|Phenny Lynn Palec |||Jul 06, 2016 11:49 AM EDT|
(Photo : Reuters) Alibaba has purchased a Beijing-based app store named Wandoujia.
Chinese e-commerce giant Alibaba recently announced that it has acquired Wandoujia, a Beijing-based Android app store. Alibaba did not disclose the financial details of the deal, but there are reports that the tech giant paid around $200 million to acquire Wandoujia.
Following the acquisition, Wandoujia will be integrated into the mobile business unit of Alibaba. Many tech and market analysts agree that the acquisition of Wandoujia would help Alibaba to establish its presence in the mobile app distribution market.
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In 2014, Wandoujia was reportedly valued at $1 billion following a successful round of financing led by SoftBank, according to Tech Crunch. Later that year, Alibaba reportedly offered $1.5 billion to buy Wandoujia, but the latter rejected the offer.
Over the years, Wandoujia has experienced serious internal strife which has significantly affected the company's value. Moreover, the entry of other competing companies further caused Wandoujia's value to dwindle. Recently, major smartphone manufacturers like Huawei and Xiaomi have decided to setup app stores instead of relying on third-party services, a decision that dealt a significant blow to Wandoujia's business.
Statistics released by Analysys International revealed that among app stores in China, Wandoujia ranked fifth and holds about 5.7 percent of the app distribution market in the first quarter of this year.
The current leader of the app distribution market is Baidu, which holds about 27.5 percent of the market share. Baidu's dominance in the market can be traced back in 2013 when the company spent as much as $1.9 billion to acquire app store 91 Wireless. Since then, Baidu has slowly shifted its business from desktop computing and search engine towards the mobile Internet platform, according to China Daily.
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