I have a confession to make. Despite claiming to have a reasonable knowledge of all things ecommerce and business, I have never really looked into Alibaba much, however, recent developments leave me wishing I had some shares in the company.
Who are they?
Alibaba Group Holding Ltd, is China’s largest eCommerce operator and viewed as a combination of Amazon and eBay. They have recently announced an operating profit of a staggering $1.1 billion, in the three months ending June 2014.
To put this figure into context, it is 42% more than Amazon’s and eBay’s profit combined, for the same period. The company also announced an increase in net income to $1.99 billion, aided by increased stakes in OneTouch and UCWeb Inc.
Market value
It is expected, these will be the last set of financial results before Alibaba’s US Product Offering. Alibaba, are predicted by observers to host their first event in New York on 8 September, preceding a trading debut of 16 September.
With Alibaba’s market value estimated at $138 billion, based on 2.34 billion shares worth $59 a share (second confession, l used a calculator). In comparison, Amazon and eBay have a joined market value of $228 billion, according to Bloomberg analysts.
New rival to Alibaba?
Alibaba founder and chairman Jack Ma has a 7.3% economic interest in the organisation and according to Bloomberg’s Billionaires Index has a cool net worth of $21.8 billion.
Reports at Forbes, suggest a group of China’s richest businessmen may be about to launch a new eCommerce platform to rival Alibaba. One thing’s for sure, they better have deep pockets… And they do!
Who are these brave people? Leading the new venture is Wang Jianlin, China’s richest billionaire. Also on board is Pony Ma and Robin Li, which when combined with Wang Jianlin have a collective worth of $48 billion.
Reports suggest Wang is ready to invest $814 million into the new venture, combining Wanda’s real estimate empire with Tencent’s payment service Tenpay and Baidu’s maps and data. Wanda would hold 70% of the new platform with Tencent and Baidu owning 15% each, according to reports.
Chinese internet users
The number of people using the internet in China is now the second largest in the world, behind India, with 632 million users with forecasters predicting this number could rise to 850 million by 2015.
The online retailing market in China is predicted by McKinsey & Co. to reach $385 billion in 2015. With figures like this it is easy to understand why three of China’s richest men want a share of the eCommerce market.
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