Alibaba Heats up the Market
by Jennifer Lin
Alibaba’s BABA share was priced at the 68 dollars apiece which exceeded the expected range of 60-66 dollars apiece on Thursday (Sept.9th) and closed the week at 93.89 a share on the New York Stock Exchange. The unexpected growth of up to 38 percent of its initial offering public price overwhelms the market. But why such a company can strike the stock market with its significant growth? And why could such a company have that growth?
Alibaba, the very first international website in China created by Yun Ma has gone public and hit the bell in New York Stock Exchange two weeks ago. Although it has a very short operating history, the company really succeeds in online businesses with a remarkable trading volume of approximately 170 billion dollars annually. For example, one of its businesses Taobao, similarly to E-bay, has become the most popular shopping site in China. It commits to provide consumers with diverse and affordable sections of products while promising the protection of secure transactions. The shopping website breakthroughs the old view of Chinese online services and opens a new era of Chinese online market. According to Alexa statistics, Taobao is one of the highest in the rank of 20 popular sites around the world. In order to bring convenience to the customers, Alibaba also create a third-party online payment platform called Alipay. (which is also similar to PayPal.) This online payment reduces the risk of online shopping deals by offering clients with confirmation of the purchased goods before the transaction goes through. The company also cooperates with some high-profile organizations such as visa, Master card and Union pay. The partnership really gives credit to the consumers when they decide to shop on such website.
I think the reason why Alibaba can have such a good result is because it has blended the way of doing businesses culturally and globally. Yun Ma, the current CEO of Alibaba takes the advantage of the huge demand of such online service in accord with the large population in China and realizes that some already successful systems in other countries can also be improved and used in China. He models the way of E-bay selling their products and establishes his own shopping sites. He not only learns from the good side of a system but also identifies the defective parts and makes progresses upon it.
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http://slant.investorplace.com/2013/10/yhoo-yahoo-stock-alibaba-ipo-marissa-mayer/