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Alibaba Research Paper

Autor:   •  October 30, 2017  •  Research Paper  •  637 Words (3 Pages)  •  635 Views

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Alibaba has become the overnight talk sensation of the finance and business world.  Its IPO has become the largest the N.Y.S.E. has ever seen.  Friday’s IPO in Alibaba, China’s biggest e-commerce company, made 25 billion in its launch with pricing at $68 a share. After the excitement calmed a bit on Monday, the closing bell on Wall Street showed the stock was trading just below $90.00, down more than 4% from its closing price on Friday. But that still left Alibaba above 220 billion dollars, which means that the company is more valuable than Facebook or Amazon. On Tuesday the 23rd it was still trading at close to $88 a share. McKinsey & Co. predicts online commerce in China will reach $395 billion next year because of Alibaba’s entrance into other international markets.  

As far as I am aware, Alibaba hasn’t developed any breakthrough technology or created any fabulous new products. Alibaba is just a holding company. In 2003, Alibaba launched Taobao, now the largest online shopping marketplace for consumers in China with more than 80 million registered users. After Taobao was established it did not take long before in 2005 Taobao overtook its U.S. rival eBay. It also owns a business to business commerce site and it has developed a cashless payments system called Alipay which is a Chinese version of PayPal.  Alibaba has substantial room for growth and has already proved that its business practices are working. For instance, unlike eBay, Taobao.com doesn’t charge its sellers a listing fee. Taobao structure is still a lot like eBay in regards of matching buyers and sellers in an online website, providing a reliable payment system, and taking a cut of each transaction. But, Alibaba gets a big chunk of its revenue from sellers paying to advertise and appear in paid search listings on the site. EBay, Amazon, and other retailers in the US have a reverse strategy and try to get their listings prominently displayed on Google and pay for sponsored listings.

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