Assessing the impact the Alibaba IPO
- By Eugene Clark
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E-mail China.org.cn, September 22, 2014
Embodiment of the Chinese dream.
The rise of a former English teacher Jack Ma, and his success with Alibaba will act as a symbol in business and exemplifies what President Xi Jinping has described as "the Chinese dream" -- the revival of a prosperous and successful China that builds upon a long, great history and rich cultural tradition.U.S. tech giants take note: China has arrived and more Chinese tech firms are on the way! The Alibaba IPO is a clear signal to Silicon Valley that the world of technology and the Information Age is now more competitive. It also shows that China has become a major player in the big leagues and is a force to be reckoned with in the future. U.S. tech companies should note that Tencent and Baidu have also developed to an advanced stage and China is now a genuine threat to the world of e-commerce, B2B and other areas. China is thus challenging the previous dominance of U.S. firms such as Google, Amazon, e-Bay and Apple in the world of e-commerce.
Attracting other investors: a celebration for Yahoo. The Alibaba IPO resulted in a major cash infusion for Yahoo, a company that has been struggling in the last few years. As a significant shareholder in Alibaba, Yahoo now has some cash to reinvest, to return to shareholders and do other things to energize and lift its future performance. The lesson here is that other U.S. and foreign investors should take greater interest in the potential of the China market which already has a billion mobile phone users and over 600 million people connected to the Internet, more than double the entire U.S. population.
The story continues; there will be more to come. It is important, as Alibaba Group's Executive Chairman Jack Ma mentioned himself, that Alibaba's work is far from done. The IPO is only a major milestone on a continuing journey. There is much the company will be able to do in the future to serve different regions of China more adequately, especially the interior and western regions. In future years, Alibaba will no doubt also extend its operations to other countries and seek to repeat its success there. Alibaba also intends to play a key role in reaching out to and helping to empower small and medium size businesses so that they may be able to participate effectively in e-commerce and e-business in the global economy.
China has entrepreneurial talent and it is important that it be developed. Finally, Jack Ma's story and Alibaba's success demonstrates China's potential to create the environment to nurture other entrepreneurs from various walks of life and sectors of the economy. Many of Alibaba's team and local investors will have become millionaires overnight. Many of these will in turn invest in other companies and startups. Alibaba's success may also encourage Chinese citizens working abroad to return to China and help develop its immense potential. China should take note of the strong business growth in the United States occurring in businesses created and led by women. In developing the talent of its women, China has a reservoir of significantly underdeveloped economic potential, especially in relation to new business growth.
The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/eugeneclark.htm
Opinion articles reflect the views of their authors only, not necessarily those of China.org.cn.
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