Some Chinese firms censored during the workday Alibaba’s websites. Those that do not suffer a recurring problem: the messengers erupt every few minutes in the office to take the packages with purchases of employees. Creating Jack Ma is a real social phenomenon in China. Abroad, however, it is still virtually an unknown company. These are some of the reasons that have led to spectacular debut yesterday in New York Stock Exchange:
1.-The undisputed market leader in China
Alibaba, based in Hangzhou in 1999, is the largest cluster of e-commerce in China, precisely the country with largest marketplace in the world . Unlike Amazon, the Asian firm sells nothing but the ecosystem and provides tools where small entrepreneurs, some from the poorest regions of the country, and large corporations are directed to the consumer.
The main divisions of the company, which controls about 75% of e-commerce in China, are Taobao (the real jewel in the crown, a website where companies and spontaneous fight for the attention of consumers), Tmall (a more regulated, without copies, online market you are in, for example, Mango and Zara land where very soon) and alibaba.com (a page that connects Chinese suppliers with companies foreign).
Alibaba has also expanded its tentacles to the payment systems (Alipay, allowing, for example, pay by mobile phone bill for electricity and water, or buy a Coke from a vending machine), finance (Yu’e Bao, monetary fund investments that tens of millions of Chinese have entrusted their savings) services in the cloud ( Aliyun), for group purchases (Juhuasuan), the crowdfunding (Yulebao), direct sales between Chinese suppliers and foreign consumers (AliExpress) and many more businesses.
2.- Grande transactions, not both turnover
It is said that Alibaba is larger than the combination of Amazon and eBay American firms. This is only in terms of transactions, the computation of the purchases made on the websites of Alibaba, which amounted to about 230,000 million euros in the year ended June 30, counting only Taobao, Tmall and Juhuasuan. This is relevant because it proves its dominance of Asian market, but it is not the most important.
The signing of Jack Ma keeps only a small part of these purchases as revenue. Its global sales reached about 6,560 billion euros in the same period, only 11.3% of the revenue from Amazon and eBay about half, both Alibaba in 2013, on the other hand, no breaks down how much of your income is up to each business division. We only know that the sum of Taobao, Tmall and Juhuasuan assumed 81.6% of the total.
The behavior of Alibaba itself is remarkable, however, in terms of profitability and growth. benefits almost reached 3,000 billion euros in the year to June 2014, representing 44% of revenues and a dramatic increase of 170% over the previous year. Revenues also only 52%, which means that the company is becoming more profitable day increased. In contrast, Amazon lost money in 2013, although it is a deliberate business strategy, and the benefits of eBay just reached 18% of revenues.
3.-The secret of success
The explosive growth of Alibaba is explained by two reasons: the sudden transformation of China into the largest e-commerce market in the world and the expertise of Jack Ma and his.
With over 600 million Internet , the 2013 China surpassed the United States as the largest online marketplace in the world, according to iResearch estimates. The Chinese buy more often than their Western via computer or mobile peers. Electronic sales have soared mainly because the traditional trade is underdeveloped. Many Chinese cities still do not have modern shops and consumers wary of the quality of the products.
Jack Ma took advantage of the moment. He swept the Chinese market by creating a platform to eBay (Taobao) that, unlike its American competitor, did not charge entry fees entrepreneurs or commissions. Even today, Taobao revenue from advertising and marketing services. Tmall, however, charges entry fees and sales commissions ranging between 0.3% and 5%.
Alibaba created an ecosystem where consumers feel safe. Besides the usual rating of any website, Taobao customers can know how many individual products each dealer has sold in the last month or how many have been returned. This was key in a country with so many scams. Jack Ma also consolidated its rule despite the huge international and national competition. The Chinese giant is still fighting against Amazon and Wal Mart in their own territory, and also against powerful local rivals like Jingdong
4.- next step. International expansion
Jack Ma and a group of 27 partners will maintain control of the company, appoint most of the board, although not own most of the shares. Never, in any of the numerous funding rounds last, Alibaba has been able to give the expansion near 17.000 million euro raised in the IPO yesterday in New York. Should we prepare for a landing in the markets of Europe and the United States
Yes and no. International sales of Alibaba is still insignificant: as low as 3% of the total, with 183 million euros. In the document sent to the American regulator, the firm notes that its overall strategy is promote direct sales of Chinese foreign consumers (AliExpress) providers and facilitate the entry of foreign firms in China Tmall through. The Asian company seems to rule, therefore, a direct battle against companies based in developed countries, such as Amazon and eBay.
A no analyst out of his hands, however, that Jack Ma wants to turn his creature in a global actor, a symbol of modern China and enterprising recognizable all over the world. “Soon he’ll be ready to let the world know we” promised in one of the promotional videos of the IPO. Alibaba raids in developing, especially in Russia (which has become the market leader), countries have been successful. Perhaps the conquest of Europe and USA take longer. But the direction imposed Captain is clear.
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