Mogujie, a Chinese social shopping platform, announced today $200 million in its fourth funding. Investors include Hopu Fund, TBP Capital, Qiming Venture Partners, IDG Capital Partners, and Banyan Fund.The company is reportedly now valued at $1 billion.
We don’t yet know whether the reported acquisition talks with Alibaba Group were called off or that’s just a false rumor.
Started as a Pinterest-style shopping 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 its Youdian platform for retailers to sell goods directly to its users, thus becoming a marketplace. So far, 60 percent of the startup’s monthly sales come from mobile. The company said a part of the new funding will be used for building this marketplace.
Alibaba, the Chinese e-commerce giant, was allegedly unhappy with the rise of social shopping services — including Mogujie and its direct competitor, Meilishuo — because they lured users away from Alibaba’s Taobao and Tmall marketplaces where they 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 images/goods are actually from Taobao and Tmall) to purchase. Rather, Alibaba makes a large part of revenues from search marketing and display ads within its sites. So Alibaba needs users to see display ads and ads in search results — and it would be a big problem if users browse for the same items on other sites instead.
Now with the marketplace, Mogujie will be a direct competitor to Alibaba and other marketplaces or retailers. The valuation can only be justified if Mogujie can successfully convert a large number of users who are used to browsing items on Mogujie (but buying them on other sites) to purchasers within the Mogujie marketplace.
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.
This story originally appeared on TechNode.