Alibaba, China’s largest e-commerce company, has begun the process of an initial public offering in the United States. Citing an interest in becoming a more global company it is working towards a listing on the New York Stock Exchange.
Alibaba is an e-commerce giant, founded by Jack Ma in a one-room apartment 15 years ago, it is now often compared to Amazon, with aspects of PayPal and Google, and their IPO is expected to be one of the largest of all time.
With the total gross merchandise traded on Alibaba last year at around $240 billion, (which is more than double Amazon’s roughly $100 billion) and annual revenue amounting to $6.7 billion, analysis believe that Alibaba could achieve a valuation of over $130 billion.
The online shopping space has become increasingly competitive in China. The country’s second biggest e-commerce player, JD.com, has gained market share recently by partnering with China’s biggest social media company Tencent to link its services with the country’s popular messaging app WeChat.
Despite this Alibaba still holds 45% of China’s e-commerce market and is beefing up its mobile services to keep up with China’s expanding population of smartphone users. It is also actively diversifying its portfolio, recently buying a controlling stake in ChinaVision Media Group Ltd for $804 million, giving it access to TV and movie content. Alibaba has also invested aggressively in gaming and instant messaging to more directly compete with Tencent.
Prior to the IPO, Alibaba is in discussions with Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs Group, J.P. Morgan, and Morgan Stanley for lead underwriting roles.
The listing will be closely watched by Alibaba’s two largest shareholders – Yahoo Inc, which owns 24 percent, and Japan’s Softbank Corp, which controls 37 percent.
