China-Based eCommerce Group Alibaba Throws $280 Million into Tango Messaging App

Mar 28, 14 China-Based eCommerce Group Alibaba Throws $280 Million into Tango Messaging App

News broke this week that Chinese eCommerce behemoth Alibaba, often touted as the eBay of the East, has invested $280 million dollars in budding messaging app Tango. Tango, a relatively new player in the mobile communications game, sports over 200 million users, over 70 million of which are classified as active. The influx of capital from Alibaba marks an important point of stability for the fledgling service, and it also grants the Chinese firm a minority stake in the company as it draws near to its upcoming IPO in New York City. The offering is expected to bring an estimated $200 billion value to Tango.

The Continued Move Toward Mobile Dominance

Industry analysts paint the move by Alibaba as a continued sign that huge tech companies are realizing the role of mobile communications platforms in ever growing global eCommerce. Consumers are expected to drive 13.5% compound annual growth of eCommerce levels across the world between 2013 and 2018. With explosive growth in mobile usage of 115% in 2013, it should be no surprise that eCommerce companies are looking for better ways to cut out a piece of the pie for themselves. When you further consider that the usage of mobile messaging apps, Tango included, grew by 203% last year, Alibaba’s $280 million vote of confidence shouldn’t be surprising to anyone.

A High-Tech Soda War?

Alibaba’s investment in Tango is part of a recent trend by big tech companies looking to take advantage of the burgeoning mobile app market. Facebook recently bought WhatsApp, an extremely popular mobile messaging service, for a whopping $19 billion dollars. According to many reports, it successfully bought the company out from under Google’s watchful eye. The search engine giant had been trying to negotiate a deal with WhatsApp but found itself unable or unwilling to match the offer from Mark Zuckerberg and Facebook.

As mobile messaging apps continue to become more popular — thereby earning more attention from web marketing firms — it’s likely that these sort of bidding wars will become more prevalent. For those of us who have been around for a while, this new battle between tech companies evokes memories of the long running soda wars between Coke and Pepsi. The first shot of that war was Pepsi’s 1975 “Pepsi Challenge” campaign. As more and more tech firms from around the world vie for control of Tango, WhatsApp, and similarly popular and potentially lucrative tech businesses, it’s possible that we’ll see the same sort of bare-knuckle marketing brawl ensue.

Now over to you: Is this the start of a bidding war over domination of the mobile communications sphere?

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