Alibaba

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http://www.economist.com/news/business-and-finance/21619213-chinas-big-e-commerce-site-dominates-its-american-peers-how-alibaba-measures-up

Alibaba went on public on September 19th GMT. Its market capitalisation for starting trade on New York’s Stock Exchange is $168 billion, which has the largest IPO in the Unite States. (IPO, is the abbreviation of Initial Public Offering, which means the first sale of stock by a private company to the public.) It is bigger than Ebay, Amazon and Paypal put together. Apart from that, according to Jay Ritter, a finance professor at the University of Florida, who suggests that at average, the bigger the company is, the better in its long-run stock performance. Alibaba seems already succeeded in the beginning.

I think Alibaba has the true potential for long-run growth. First reason is that Alibaba occupies 80% online retail market in China, a country with enormous population, therefore the number of potential customers is huge.  Secondly, the ways of online shopping is very convenient and cost-saving. Since the suppliers do not need to pay for the fixed cost like rent, they can charge the products’ price a little lower with same profit. One PoD of Alibaba compare to other online commerce is Alibaba’s delivery service is better with less time.

Alibaba is a hot topic now and I do believe it can has a long-run performance.

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