Alibaba IPO – 4 Things You Should Know

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As Alibaba gears up for its initial public offering (IPO) on the New York Stock Exchange (NYSE) today, here are four things you should know about the Chinese group that is behind the world’s largest collection of e-commerce websites.

The company has begun trading on the NYSE under the ticker symbol ‘BABA’, with the company having announced yesterday that it would be pricing shares at US$68 each. The share price has given the e-commerce giant an initial market value of US$168bn, with some analysts predicting that today’s US$21.8bn IPO could be the largest one ever for a US listed company.

We have decided to bring you four insights into the Chinese e-commerce group that’s bigger than Amazon and eBay combined.

1. Jack Ma – founder

Jack Ma, aged 50, a former English teacher, founded Alibaba in 1999 in Hangzhou, China. Bloomberg Billionaires ranks Ma as being 34th on its ranking of the world’s richest people, citing him as having a net worth of US$21.9bn.

As the story goes, Ma started the company after raising US$60,000 from 80 people. He is also known for being a colourful employer. BBC.comfor instance, reports how Ma donned a Mohican wig and sang Elton John’s ‘Can you feel the love tonight’ to employees during the company’s 10th birthday celebrations in 2009.

Alibaba Group logo

2. Alibaba Group controls 80% of the Chinese e-commerce market

In addition to the business-to-business (B2B) wholesale platform Alibaba.com, e-commerce businesses that come under the Alibaba umbrella include Taobao.com. It’s the largest online shopping website in China apparently. Tmall.com, meanwhile, is a third-party platform for brands and retailers in China. According to Bloomberg, Tmall processes some 11.3bn orders a year from 231 million buyers who hail from more than 190 countries.

Alibaba also operates the online group-buying marketplace Juhuasuan.com. This is in addition to AliExpress.com, a global online marketplace that enables consumers to buy directly from China. As well as this, the group operates the online wholesale marketplace 1688.com.

If that were not all, Alibaba has also branched into the cloud computing space via Aliyum.com – it targets businesses and entrepreneurs.

3. The Yahoo! connection

Yahoo! has been a shareholder since 2005 when it purchased a 40% stake in the company for US$1bn. Then, in 2012, Alibaba bought back a 20% stake in itself from Yahoo! for about US$7.1bn.

Yahoo! could be in for a cash bonanza following the IPO, with The Wall Street Journal reporting that it will reap some US$5.1bn after it sells 121.7 million of its shares in Alibaba.

4. Alibaba is targeting the US e-commerce marketplace

Alibaba has already made its debut in the US e-commerce marketplace with the launch of 11Main.com in June. Via this site, the group is aiming to emulate the ‘main street’ shopping experience. Still in beta mode, 11Main.com is an invitation-only marketplace that aims to connect consumers with specialty shops and boutiques.

In October 2013 Alibaba also led a US$206m investment in the US retail website ShopRunner.