Alibaba is often described as one of many greatest tech corporations you could have by no means heard of... or maybe to put it one other manner, Steve Jobs, Bill Gates, Mark Zuckerberg, Jeff Bezos and... Jack Ma???
Alibaba describe themselves as 'China Distributors & Exporters' and have become one of the largest firms in the world. With an upcoming itemizing on the New York Stock Change, the corporate has a projected worth of $2.0 billion Dollars. Yes you heard accurately, that's $2.0 beeeeeleon Dollars as Dr Evil would gleefully say... To offer you somewhat context, Amazon is currently price $one hundred sixty five billion Dollars and Facebook some $190 billion Dollars and these are each effectively established 'house-hold' names across the world.
So how did Alibaba, a company so out of the western public eye and consciousness, come to be such an Web large that now threatens the business interests of the likes of Amazon and eBay?
Humble beginnings
Based in 1999 by Jack Ma, a Chinese English Instructor and some friends, their ideology was easy, that they would provide a place to permit small business to trade pretty over the internet. Why the name? Well, Jack thought it would be instantly recognizable from the fairy-tale 'Alibaba and the 40 Thieves', not sure I'd go for a corporation name related to the criminal fraternity however who am I to argue...
Roll forward 15 years and Alibaba is THE place to do business with China... like a virtual shipping port, where all trade and export goes out to the world, Alibaba makes it simple for international B2B to do enterprise with the economic powerhouse that is China. Alibaba is reported to have 80% of China's e-commerce market and reported $1.1 billion Dollars in working revenue for the second quarter, 42% more than Amazon and eBay combined.
What model does Alibaba operate?
Alibaba is basically a MarketPlace enterprise like eBay, so not like Amazon they do not own the products or operate warehouses or the expensive logistics of doing so, instead retailers use the service to promote to customers and companies directly.
Of course, outside of China, Amazon still reigns supreme within the international e-commerce stakes with effectively established relationships and global distribution. Amazon have themselves been in China for 10 years or so albeit with restricted market share.
Alibaba are actually shifting into cross-border e-commerce and with no let up in China's want to own western items, Alibaba seems to be in a great position to fulfill the need.
Your personal Bank? Why not...
One advantage Aliexpress Alibaba [1] has over Amazon is its e-payment arm called by the somewhat authentic name of AliPay. Compared to PayPal, AliPay processed $519 billion Dollars price of digital payments in 2013 whereas PayPal processed a mere $180 billion Dollars.
AliPay is just not just a cost transaction service additionally they provide Financial savings and Investments meaning that Alibaba is supported by it's totally own personal Bank something that Amazon can not declare, I wonder if Jack opens his digital bank vaults to the immortal cry of 'open sesame'? please say he does...
What next?
There was a lot hype in regards to the IPO for Alibaba and definitely the press coverage is doing no harm in educating folks about Alibaba and will drive the success of the launch.
I am positive that Alibaba's new US position will cause a great deal of nervousness for other e-commerce rivals, however that's no bad thing as competition finally drives down prices and prevents large companies from being complacent.
And eventually, Alibaba have declared that they are going to be around for 102 years so I'll make sure to comply with up this article in 2.01 and let you know the way issues went... in the meantime be careful for the IPO September 8th...