As Chinese e-commerce continues to gain prominence among the US and European markets, its biggest company—Alibaba–plans to make an IPO in the New York Stock Exchange later in 2014. This latest move suggests that Chinese e-commerce giants, such as Alibaba and JD.com, are proving to be heavily influential in the global market.
Chinese E-commerce? What is Alibaba?
Alibaba is considered to be the largest and most popular online retailer in China. The website currently processes more transactions than both Amazon and eBay, and is starting to gain a reputation around the globe as a reliable and competitive retailer. Founded in 1999 as a business-to-business (B2B) website, Alibaba has grown to be an important part of the Chinese e-commerce market. Alibaba even includes its own payment service, Alipay (similar to PayPal, owned by eBay). Its founder, Jack Ma, even states “Alibaba is the infrastructure of Chinese e-commerce.” Its IPO in New York is predicted to be the largest ever, and could generate $15 to $20 billion in shares of its stock.
How Will the IPO Affect Chinese E-Commerce?
Experts predict that the Alibaba IPO will be extremely successful. Because of a slowing domestic economy in China, Alibaba is choosing to list its shares in New York, not China. As the company goes public, it will likely bring about a new era in e-commerce. Many will begin to mention Alibaba in the same breath as Amazon and eBay, the American e-commerce giants.
If and when Ailbaba goes public in the US, there will be a new contender in the e-commerce ring. Alibaba will likely use the massive amount of cash gained from investors to enter American and European markets. Since Alibaba also features sites dedicated to business-to-consumer sales and even a platform for medium-sized merchants to sell products, most consumers would embrace Alibaba as a useful alternative to Amazon or eBay.
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