Beijing

NetEase Inc., China’s second-largest video game publisher, is deepening a push into e-commerce with plans to increase spending on products from the US, Europe and Japan to sell to local consumers.

The company’s Kaola e-commerce business will buy about $11 billion (Dh40 billion) of inventory over the next three years from the US, Europe and Japan to woo customers with everything from Dutch baby formula to Japanese cosmetics, Kaola Chief Executive Officer Zhang Lei said in an interview. The number will probably be higher after factoring in purchases from Australia and South Korea.

Best known for games, including bringing global title Overwatch to the Chinese market, Netease is bolstering growth by tapping into local demand for established international brands. Overseas health supplements and cosmetics have gained favour in recent years among a populace unnerved by a rash of safety scares. While Alibaba Group Holding Ltd. dominates e-commerce in the country by acting as a digital landlord to sellers, Kaola buys almost all its inventory directly from companies overseas, bypassing local distributors and middlemen to lower costs.

“This industry could be worth 500 billion yuan ($75 billion) by about 2021,” Kaola Chief Executive Officer Zhang Lei said in an interview. “This is a new racecourse — Kaola wants to be a major leader here and capture much of the market share from the existing leaders.”

Kaola is the biggest player in China’s cross-border e-commerce sector with about 24 per cent of the market in the first half of 2017, according to data from iiMedia Research. That’s ahead of Alibaba’s Tmall Global with 20 per cent and Vipshop Holdings Ltd.’ s 16 per cent.

In the next three years, Kaola will buy $3 billion of products from US companies, Lei said. She singled out health supplement chain GNC Holdings Inc. among its favoured suppliers. This comes on top of announcements made last week and in April that the company would spend 500 billion yen ($4.4 billion) in Japan and 3 billion euros ($3.5 billion) across Europe respectively over the same period. Further funds would be spent buying stock from Australia and South Korea, she added.

— Bloomberg