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So What Exactly is Alibaba?

So What Exactly Is Alibaba? - Forbes

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Alibaba owns stakes in all sorts of things, but operates chiefly through three sites: Taobao, China’s biggest shopping site; Tmall, which specialises on online sales of branded goods and focuses on China’s fast-growing middle class; and, which connects Chinese exporters with companies elsewhere in the world. Between them they host millions of merchants and businesses, and have hundreds of millions of users; in terms of the amount of business handled, one can argue that Alibaba is actually the world’s biggest online commerce company, not just China’s. On top of its core sites it owns, a Chinese equivalent of Paypal; and has large stakes in Sina Weibo, China’s version of Twitter; and Youku Tudou, the closest Chinese equivalent to YouTube. Lately, it’s gone a bit scatty in its acquisitions, buying a film business and half of the Chinese football club Guangzhou Evergrande. It has even talked about entering the banking industry, and already has a remarkably popular mutual fund called Yu’e Bao.

In other world, it is all things Chinese Internet. 


How big a market is China? Well, Alibaba – through its various sites – hosted $248 billion of online shopping transactions last year, which is, according to the Wall Street Journal, more than eBay and combined. The Journal cites data from a group called iResearch projecting that China’s e-commerce market has gone from $74 billion in 2010 to $295 billion by the end of 2013, with a  projected total of $713 billion by 2017. The Hong Kong broker CLSA says that 80% of China’s online shopping is done through Alibaba.


Clearly, then, there’s much more to Alibaba than there was when listed. But there is one thing in common: the power of a magnetic personality at the top. Just as Hong Kongers trusted blindly in Li Ka-Shing as a bulletproof scion of business excellence, Chinese admire Jack Ma, the founder of Alibaba (though no longer its CEO). He still owns almost 8% of the company and is enormously influential within it. 

He has actually been a vocal critic of the capital markets, once writing that he believed in ‘customers first, employees second, shareholders third’ – a comment he made to employees on the very day Alibaba filed its IPO prospectus. Personally, this reminds me of Richard Branson, who took the same view when he listed Virgin; he ended up taking it private again before long, though there’s no question of that happening at Alibaba after a listing as big as this one. 

There is a similar flamboyance too, as the BBC notes in a recent profile: “Not every company boss would dress himself in leather, don a Mohican wig, lipstick and a nose ring and sing Elton John’s Can You Feel the Love Tonight? to his 16,000 employees. That was exactly what Alibaba’s founder, Jack Ma, did to celebrate the company’s 10th anniversary.”

It makes me wonder why Alibaba wanted to go public. 

And now they're public. And they're HUGE. 

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