Alibaba buys cloud storage firm

Chinese e-commerce firm Alibaba Group announced it would acquire leading domestic cloud storage service provider Kanbox on Wednesday, in an effort to further develop its business in the cloud computing sector and improve user experiences on the mobile front.

With Kanbox's technology, Alibaba aims to forge an efficient and secure personal cloud storage platform, a PR representative told the Global Times Wednesday, though refusing to reveal the financial details.

After the acquisition, Alibaba plans to directly connect its user accounts with Kanbox's accounts system, enabling online shoppers and sellers to save their trading data in virtual facilities hosted by Kanbox, according to a statement sent to the Global Times by Alibaba.

The statement also said that in the future the company will put more effort into developing its cloud storage unit, as the cloud storage service plays a key role in developing its "wireless ecological system."

"Alibaba has launched a smart TV and smartphone. If it intends to stream its online shoppers' and sellers' trading data from PC to smart TV and to smartphone, thus realizing multi-device interaction, the top priority is to improve its cloud storage service," said Wang Jun, an industry analyst with Analysys International.

Alibaba's move could also increase the loyalty of its users as an increasing number of people are using personal cloud storage, he said.

Data from iResearch predicted that in 2013, the number of individuals using cloud storage service will be 223 million and the market penetration rate can reach 36.7 percent in China.

Domestic Internet companies, including Baidu, Tencent and Sina, have also picked up on this trend and are developing their own cloud storage products, which threatened many startups like Kanbox in the sector, said Wang Jun.

Wang Tingting, an industry analyst with iResearch, echoed that Kanbox used to perform well in the market, but dropped to its current fourth place in terms of user numbers soon after Baidu, Sina and Qihoo 360 gained footholds in the field.

With Alibaba's financial support, Kanbox may gain back some market share, and the takeover could also help Alibaba further build up its user base, he said.

According to the statement, Kanbox has accumulated 15 million users after the service came online in 2010.

"The domestic e-commerce leader has carried out many takeovers, such as buying stakes in China's social networking service Sina Weibo and online mapping service Amap, in recent days, which will not only enrich Alibaba's business layout, but may also contribute to its potential IPO," Wang Tingting told the Global Times Wednesday.

Reuters said Wednesday that Alibaba has decided to seek an IPO in New York, as Hong Kong's bourse did not accept its shareholding structure.

Alibaba declined to comment on the IPO when contacted by the Global Times, only saying that the listing location has not been determined yet.