As of today, investors have estimated a value proposition of approximately $215 billion USD. To put this into perspective, that is the value of Amazon and Ebay added together!
How and why?
Firstly, Alibaba’s profit margin is at a whopping 44%, which puts the company leagues ahead of any competitor in terms of net income. The second significant advantage that Alibaba has is its customer base. There are currently already more internet shoppers in China than the US. Furthermore, as access to technology is more and more common, there is also a lot of potential for Alibaba to expand its market. Also, the unique feature that Alibaba provides is contact with manufacturers, which allows bulk buying as well as single item shopping, catering a larger range of consumers. Altogether, these factors contribute to why Alibaba’s growth rate also places first among other competitors.
Apart from its competitive advantage, Alibaba has also made good decisions in terms of strategically and also in their private investments. Alibaba are large shareholders of multiple up and coming companies in different industries including Youku and Weibo which are popular Chinese social network sites.
Alibaba has recently made a strategic gesture to convert itself to public company. Within a short time, its share prices has jumped up to $100 per share. There are multiple reasons why this is an excellent move. It raises capital to which the company can expand internationally and also promote itself, thus building a brand image in the global market.
Personally, I have purchased from TaoBao (founded by Alibaba) multiple times in the past and can vouch that prices are generally lower than foreign internet shopping sites (all hail cheap labour!). Being able to provide lower average priced goods is also a contributing factor to the rapidly expanding customer base.
Will this expansion plan be unstoppable? Look out for Alibaba in the future as they dominate the global market!
http://www.privco.com/alibaba-is-worth-100-share-private-company-stakes-worth-billions-infographic
http://www.investopedia.com/articles/investing/081214/5-things-know-about-alibaba-ipo.asp