It’s no secret that Alibaba (BABA) founder and CEO Jack Ma is an ambitious man. But, if several recent Alibaba investments are any indication, his ambitions may be running a little on the wild side.
That’s because — if a current round of funding for one retail startup closes — BABA will have invested in two different U.S. companies this year that intend to disrupt or compete with Amazon.com (AMZN). Ma has said, however, that he has no interest in competing with AMZN and eBay (EBAY) in the U.S.
So, has Ma changed his mind?
That remains to be seen. And while I’m sure AMZN isn’t the least bit worried about BABA swooping in on the U.S. market today, Alibaba could be in the early phases of its American expansion.
BABA’s Investments in Jet.com and Boxed
Jet.com is perhaps the most buzzworthy retail startup to pose a legitimate threat to AMZN in the past few years; a recent $500 million funding round led by Fidelity put the company at a pre-money valuation of $1 billion. The company offers shoppers discounts for buying multiple items, using a debit card instead of a credit card, and waiving their right to return an item.
BABA CEO Jack Ma was outed as a silent investor in the company’s $140 million funding round in February.
Now, nine months later, it seems BABA is investing in another U.S. e-tailer with its sights set on AMZN: Boxed, a website that focuses on selling products in large quantities to consumers. Think of it as the online version of Costco (COST), minus the annual membership fee.
Currently, Alibaba is close to closing an $80 million deal with Boxed, according to Re/Code.
These two companies alone aren’t going to take down AMZN, which is expected to generate more than $100 billion in revenue this year. But, the deal expands Alibaba’s reach in the West, and if one or both of these relatively small investments ends up taking off in a big way, I wouldn’t be surprised to see BABA move in with additional funding.
What’s more likely, though, is that BABA is using its cash hoards to buy influence in the U.S. so it can learn the market itself. It’s already taking a page or two from the playbooks of AMZN and Alphabet (GOOG, GOOGL), investing in its own streaming video, cloud computing, and ride-hailing services.
Last week, Alibaba agreed to buy the “Chinese YouTube,” Youku Tudou (YOKU) for what amounts to $3.7 billion in cash. It’s an investor in Lyft, which — with additional funding from BABA — could follow the lead of chief rival Uber (in which Google is an investor) into driverless cars.
And, if BABA ever did decide to compete in the U.S. retail market, having a fleet of driverless cars to perform deliveries wouldn’t be a bad idea.
While that sort of service is still a long ways off, and competing on such a level is highly hypothetical, what’s not hypothetical is that BABA is showing a strong interest in U.S. e-commerce companies not named Amazon.com.
If that trend continues next year, AMZN may want to watch its back.
As of this writing, John Divine was long AMZN. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
