Alibaba may spend a staggering $38 billion on strategic investments and acquisitions in 2016. The Chinese e-commerce behemoth has spent about $15 billion this year so far to take on Baidu and Tencent in China’s fiercely competitive Internet market. BNP Paribas analysts led by Vey-Sern Ling said in a research note Thursday that three of China’s biggest Internet companies spent more than $30 billion on acquisitions this year.

Alibaba May Spend As Much As $38B On Acquisitions In 2016: BNP

BAT triumvirate slug it out in O2O

BNP analysts reached the figures for 2016 based on potential free cash flow, cash in hand, and the ability to take on more debt, reports Tim Culpan of Bloomberg. Alibaba’s estimated spending power is higher than Tencent’s $35 billion and Baidu’s $15 billion. The three companies, often called as China’s BAT, have been investing aggressively in online-to-offline services such as ordering food or hailing a ride from your smartphone.

BNP Paribas analyst Vey-Sern Ling said in his 40-page research report that the three companies will likely pursue more deals next year. It will lead to industry consolidation. The Chinese O2O sector has already seen the big-ticket merger of Alibaba-backed Meituan and Tencent-backed Dianping. Earlier this year, Alibaba-backed taxi-hailing service Didi Dache merged with Tencent-funded Kuaidi to take on Uber.

Alibaba’s GMV growth may slow down in 2016

Consolidation leads to reduced competition, while the BAT will benefit from a broadened ecosystem. In 2015, Tencent spent $16.3 billion on 37 completed or pending deals, followed by Alibaba’s investment of $15 billion on 27 deals. Baidu was the distant third with 15 acquisitions for just $878 million. Notably, BNP Paribas analysts have a Buy rating on all three stocks.

Ling and his colleagues noted that Tencent’s growth in 2016 will be driven by online gaming and advertising sales. Alibaba’s gross merchandise volume (GMV) growth is expected to slow down as the Chinese e-commerce market matures. Baidu’s core search business is likely to plateau as mobile traffic growth slows. The Chinese search engine giant told Bloomberg that it didn’t earmark a budget for acquisitions and investments.