Alibaba seeks to crack the US market with a massive IPO
- By Corrie Dosh
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E-mail Beijing Review, January 13, 2015
Alibaba Group Holding Ltd., the Chinese e-commerce behemoth that rivals Amazon and eBay, may shortly become the third most valuable Internet company traded in the U.S. (after Google and Facebook). Alibaba is seeking $162.7 billion in its New York Stock Exchange IPO, and could raise as much as $21 billion, according to a recent regulatory filing – the largest listing in U.S. history.
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Alibaba founder Jack Ma attends a roadshow presentation in early September. |
China is now well established as a major power in the Internet-driven future. While many Americans may be unfamiliar with the brand, a good portion of China's 642 million Internet users – about double the total U.S. population -- favors Alibaba. And the market still has room to grow. The company has already invested in six U.S. startups, and is building an American online marketplace called 11 Main. Wall Street is eager to snap up shares of the company, seeing it as their best chance to buy into China's growth. Online shopping in China is expected to grow at an annual rate of 27 percent, according to iResearch Consulting Group.
The U.S. has much to learn from the meteoric success of Alibaba and its founder Jack Ma. The company has learned from its U.S. counterparts and avoided some of their pitfalls. Unlike eBay, sellers on Alibaba's Taobao site do not pay a fee. Instead, revenue is generated through advertising and extra services, helping Taobao to attract 58 million small- and medium-sized retailers in addition to millions of amateur sellers. The company offers payment on delivery, a key factor to winning Chinese consumers' trust.
Alibaba doesn't just link buyer and seller as eBay does, or sell to consumers like Amazon, or orchestrate payment fulfillment like PayPal – it does all of the above.
"People keep on asking me what's the difference between Amazon, eBay and Alibaba. I would say Amazon and eBay are e-commerce companies and Alibaba is not an e-commerce company," Ma said as he kicked off a global roadshow this week to raise capital. "Alibaba helps others to do e-commerce. We do not sell things. We call ourself a company designing a platform, a company that is running an ecosystem."
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