Will Alibaba Dwarf Facebook?

Following Facebook and Twitter comes a tech IPO which could dwarf them both – Chinese internet behemoth Alibaba has announced plans to go public.

The name may not yet be as familiar in the west as eBay or Amazon. But bearing in mind it is said to be the source of 60% of all parcels delivered in China – and it is looking to expand into the US – that could all change very soon.

Formed in 1999, the group owns the three largest Chinese e-commerce retailers – Taobao, Tmall and Juhuasuan, and its Alipay system is behind a large proportion of the country’s online transactions.

Roughly speaking, Taobao is the Chinese Ebay, Tmall is the Chinese Amazon and Alipay is the Chinese Paypal. Juhuasuan mainly offers discounted products for short periods of time.

Considering that in their home territory, all of these outlets have a larger market share than their equivalents do in the US – it’s obvious that Alibaba is capable of making big waves.

Last month, a survey of 12 analysts by Bloomberg valued the company at $168 billion, after it reported strong 3-month profits and a 66% increase in revenue in the quarter to December 2013. And founder Jack Ma is showing he can give the US tech superstars a run for their money in the philanthropy stakes, having set up what is said to be Asia’s biggest charitable trust with a value of $3 billion.

Although the documents filed today state that the company aims to raise $1 billion, it is expected to achieve far in excess of that when it is finally priced later this year, with many predicting it will top the $15 billion raised by Facebook in 2012.

The document does not disclose what exchanges the shares will be listed on, however the news that it will be US-based alone was surprising, as Hong Kong was previously the expected venue.

This raises some interesting questions. Recent estimates from the World Bank have said that China will overtake the US as the world’s largest economy this year, rather than around 2020 as previously forecast.

Some are speculating that the US’s less stringent rules on the governance of publicly traded companies is the reason for this, or that it may be due to a fear that the Chinese government is planning heavier regulation of online payment systems, which could affect the Alipay business.

Whatever the reason, and in reality there likely to be a multitude – the emergence of a behemoth of this stature onto the world stage has the power to make waves. The wolves of Wall Street will have dollar signs in their eyes, while the online giants of the west may be looking slightly worried.

-------------------

I really appreciate that you are reading my post. Here, at LinkedIn, I regularly write about management and technology issues and trends. If you would like to read my regular posts then please click 'Follow' (at the top of the page) and feel free to also connect viaTwitter, Facebook and The Advanced Performance Institute.

Here are some other recent posts I have written:

• The 2 Words That Will Change Your Life Forever...
• Job Interview: Why Only 3 Questions Really Matter
• The 75 KPIs Every Manager Needs to Know
• Big Data: The 5 Vs Everyone Most Know
• Caution: When KPIs Turn To Poison
• The Toughest Interview Question Of All ...And How to Answer It
• Bored at Work? Here's What To Do!
• Simple Tips To Boost Your Career And Find Your Dream Job
• The Tale-Tell Signs Of A Bad Boss
• Stop Using These 30 Phrases At Work!
• The One Thing Successful People Never Do!

Photo by Hong Wu/Getty Images