22 October 2016
Seeing huge prospects in the review apps market, Alibaba Group has pumped in 6 billion yuan into a local services venture. Photo: HKEJ
Seeing huge prospects in the review apps market, Alibaba Group has pumped in 6 billion yuan into a local services venture. Photo: HKEJ

Alibaba steps up fight with Tencent in review app market

Alibaba and its affiliate Ant Financial Services Group have injected a total of 6 billion yuan (US$966 million) into Koubei (which literally means ‘word of mouth’ in Chinese), a third-party review site in China which is similar to Hong Kong review app OpenRice.

In making the investment, Alibaba is making its aim clear that it wants to take on Tencent-owned Dianping. Last year, Tencent spent US$400 million to acquire a 20 percent stake in Dianping, which operates a Yelp-like review website in China.

Ant Financial’s payment operations manager Fan Chi will become Koubei’s chief executive. Given the explosive growth in mobile internet applications, China’s service industry is undergoing a transformation, Fan told the media.

Unlike the OpenRice platform which mainly focuses on restaurant reviews, Alibaba wants Koubei to become a one-stop review site on a wide spectrum of services used in everyday life.

Medical outlets and supermarkets are some of the areas Koubei will expand into.

If things go as planned, Alibaba hopes customers will use the website to get most of their daily needs met and problems solved.

It works like this. Suppose you get sick, you can reserve an appointment with a doctor through Koubei, then order through the same platform for something easy to go down — a congee set perhaps — for pick-up on your way home after the consultation.

Acquired by Alibaba in 2008, Koubei has failed to attract much traffic as a site that provides e-coupon, group-buying discount and take-away food services.

Now Koubei is given a second chance to turn itself into a viable contender in the highly lucrative review market.

Word of mouth is always an important thing to the service industry, and it is even more critical in the internet-connected present era.

People love to search for comments before they walk into a restaurant for dinner. A review site can therefore be a real money spinner once it successfully establishes its credibility among users.

Alfred Tsoi Po-tak, chief executive of OpenRice’s parent JDB, has said that the site is extremely profitable. Income mainly comes from advertising and commission from restaurants.

The group expects the number of visitors per month to reach 8 million by the end of the year.

OpenRice now provides services in more than 10 Asian markets, including Taiwan, Singapore, Thailand and India.

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