The parent of Alibaba.com Inc and Japan's Softbank Corp are in talks to set up a Japanese joint venture possibly next year that will boost the Chinese e-commerce company's footprint in that market, Softbank's top executive said on Tuesday.
Alibaba sees Japan as strategically vital to its campaign to boost its international business.
Softbank President Masayoshi Son told reporters that few specifics had been finalised but Softbank would take a majority stake in the venture, part of Alibaba Chief Executive Officer Jack Ma's strategy of expanding into Asia's largest economy.
We had a lot of base, and Alibaba has developed the engine, Son said on the sidelines of the Mobile Asia Congress in Macau, on the tip of southern China.
He declined to say the cost of the investment.
Japanese telecoms and Internet group Softbank, which holds a 33 percent stake in the parent of newly listed Alibaba.com, is looking to fast, powerful mobile phones to fuel the future growth of its Internet content business.
Son said Softbank was actively seeking investment in Internet start-up and private technology firms across the world, including in China, India and the United States.
We're studying a few investments right now, said Son, who founded the company and raked in billions investing in Internet ventures such as Yahoo Inc in the United States.
When it comes to China, Son said Softbank's strategy was not to go in by itself but to find partners, such as telecom carriers China Mobile Ltd and China Unicom Ltd.
Son said he would like to extend their success in Japan to China eventually.
Softbank's operating profit climbed 49 percent in the first half as its wireless unit's new price plans and a marketing blitz grabbed subscribers from its much bigger rivals.
The firm, which bought Vodafone Group Plc's Japanese mobile unit last year, now plans to stick to a cut-price strategy to try and lure more users from bigger rivals NTT DoCoMo Inc and KDDI Corp.
Softbank has been sharply undercutting rivals, winning 1.1 million new users in the first half, mostly from DoCoMo, which controls over half of Japan's mobile phone service market.
But aggressive price campaigns are hurting Softbank's average monthly revenue per user, which dropped by 200 yen to 4,800 yen in July through September from the previous three months, in the fourth straight quarterly decline.
Lower phone charges do not necessarily mean lower profitability, since Softbank's new users typically are heavy phone users, executives say.
But despite fears of intensifying price competition, Softbank shares have risen 27 percent since hitting a one-year low in September in the run up to Alibaba's listing. (Reporting by Edwin Chan; editing by Louise Heavens)