Mogujie, Chinese social shopping platform, announced today US$200 million in Series D funding from a group of investors including Hopu Fund, TBP Capital, Qiming Venture Partners, IDG Capital Partners, and Banyan Fund. It is reported the company is valued at US$1 billion.
It’s unknown whether the reported acquisition talks with Alibaba Group were called off, or it’s just a false rumor.
Starting as a Pinterest-style social sharing site in 2011, Mogujie claims it has had 80 million users, with 35 million being monthly active on mobile.
At the end of 2013 it launched Youdian platform for retailers to sell goods directly to its users, thus becoming a marketplace. So far 60% of monthly sales is from mobile. The company said a part of the new funding will be used for building this marketplace.
It was reported that Alibaba, the Chinese e-commerce giant, was unhappy with the rise of social shopping services including Mogujie and its direct competitor Meilishuo, for they lured users away from Alibaba’s Taobao and Tmall marketplaces where those users used to browse and search for goods.
It’s not that those social shopping services don’t direct users to where photos are originally from — most are actually from Taobao&Tmall — to purchase but that Alibaba makes a large part of revenues from search marketing and display ads within its own sites – Alibaba needs users to see display ads and ads in search results, or advertisers would spend marketing budget for user attention on other sites like Mogujie.
So it’s reasonable for Alibaba to hate Mogujie and its peers or acquire one of the biggest. Till now Mogujie supports almost all online payments services but Alipay, the online payment service of Alibaba and one of the most used ones in China.
Now with the marketplace, Mogujie is a direct competitor to Alibaba and other marketplaces or retailers. The high valuation can only be justified if it can successfully convert a large number of users who are used to browsing items on Mogujie but buying them on other sites to purchasers.
The fact that the founders of Mogujie were all from Taobao of Alibaba must be one of the reasons that investors have confidence in its getting a piece of market from biggest players.