Getting to know Alibaba
It’s not till last month I got to know about one of the worlds most fast rising e-commerce company, of course its a Chinese company but trust me you would love to know about it. We see many start-ups in this field come up in Uganda like Jaguza and Kaymu as of now forget about ebay or Amazon, Alibaba trumps them all and here is their story.
THE TRINITY : A BANK, SEARCH ENGINE AND A MARKETPLACE
WHATS IS ALIBABA?
Alibaba is world’s largest biggest online commerce company that has its origins deeply rooted in china. Its composed of three main sites — Tmall, Taobao, and Alibaba.com — It has very many users presumably in hundreds of millions, hosting millions of merchants and businesses. It handles the most businesses that any other e-commerce company joined.
Most people always think ebay or Amazon when it comes to online shopping, Alibaba is now the most popular terminus for online shopping, in the world’s fastest growing e-commerce market. Last year alone, online transactions on Alibaba $248 billion last year, more than those of eBay and Amazon.com combined. According to CLSA, the company dominates over 80% of China’s online shopping market.
HOW ALIBABA COMPARES WITH OTHER TECH FIRMS
The company is soon going public out of china, and after this IPO its expect to be the third most valuable tech company in the world according to S&P Capital IQ. It will also be one of the most valuable Chinese public companies, ranking among some of the country’s state-owned enterprises.
THEY GIVE COMPETITION A RUN FOR THEIR DIMES
Compared to Amazon and ebay, Alibaba runs marketplaces and has a huge customer base, the amount of business that flows over its sites dwarfs that of other e-commerce companies according to Forrester Research…but Alibaba earns less revenue than global peers like Google. It makes money mostly by charging merchants for advertising and transaction fees.
WHO OWNS ALIBABA?
The man behind this all is called Jack Ma a founder and the company’s spiritual leader. He spearheads any new innovation at Alibaba, Mr. Ma stepped down as CEO, but Alibaba’s corporate structure will let him and his co-founders keep control after the IPO.
Most companies, when they’re doing good, they enjoy today’s wonderful life. They don’t worry about five years later—but I worry about five years later.
Who owns Alibaba now?
Yahoo also has a stake
Founder Jack Ma will have a lot of control over Alibaba, even after it ‘s IPO. The company’s corporate structure will let Mr. Ma and other top brass nominate more than half of Alibaba’s board members. Yahoo also has a big stake in Alibaba. The company chose to list in the U.S. because the Hong Kong exchange refused to accept the structure.
ALIBABA’S FUTURE CHALLENGES
Since the world is going mobile, Alibaba has to catch up and compete for smartphone users. Just like any company that grows big, Alibaba is forging into new businesses — and bumping into powerful players like Chinese banks and regulators. And will U.S. investors buy the IPO of a company that is still largely unknown to them?
In 2012 Facebook priced its IPO at $12 Bn, in 2004 twitter’s IPO came in at $ 2.1 Bn and in 2004 Google’s IPO was at $ 1.9 Bn and now Alibaba estimates to price it’s IPO at $15 Bn a huge sum compared to it’s competition.Will it be successful?
ONLINE FAKE PRODUCTS
China is known for making products at all grades and levels, they are most known for fake products that don’t meet standards . Alibaba sites especially Taobao are known for counterfeits/fake products. For a company preparing for it’s IPO this could be a huge challenge to over come. Alibaba says it spends millions of dollars a year battling fakes, and some merchants say Taobao has gotten faster at taking down suspect listings.
Will Alibaba be the key to penetrate US and Global market?
CLSA| S&P Capital IQ| Forrester Research (Amazon)| Wall Street Journal| SoftBank and Yahoo