E-commerce is a big industry which includes Alibaba, Amazon etc. Amazon is most popular in the US, while Alibaba is more popular worldwide. Whenever there is a headline in the e-commerce industry, Alibaba is usually the first to pop up. This is not surprising since, among the worldwide e-commerce industry, Alibaba has the highest percentage based on the 2018 GMV measurement.
Amazon is worth 10 percent, lower than Tmall and Taobao, which are 13 percent and 16 percent, respectively. Then, considering that Alibaba Group is the parent company of Tmall and Taobao, it is worth more than Amazon.
However, there are many other subsidiaries under the Alibaba Group. Alibaba Group also owns Alibaba.com, the largest marketplace for B2B. There are many things you should know about the Alibaba Group, and that is the purpose of this guide.
Things you need to know about the company.
- It is huge in China.
- It’s different from Amazon.
- Its structure raises questions.
- Lack of presence in the S&P 500
- Its founder has an interesting story.
It is huge in China.
Alibaba Group’s biggest profits come from retail sales in China, particularly on the sites of its two main subsidiaries, Tmall and Taobao. Due to the high population of the country, many people prefer online shopping instead of physical stores.
Alibaba made it easy for Chinese to buy a variety of goods online by making the smallest items available regardless of price. In a year, approximately 11.3 billion purchases are made through Alibaba sites, which are actively used by approximately 231 million people.
In China, in the ranking of the most visited sites by people during the research, Taobao came in third place, and worldwide, the position was 12th. Also, Tmall, Alibaba’s second largest subsidiary, is the 37th most visited site worldwide and the 11th most visited in China.
Different from Amazon
Although they are both giants in the e-commerce industry, Amazon and Alibaba have their differences. Unlike Amazon, Alibaba only acts as an intermediary between buyers and sellers, bringing small businesses to the notice of buyers.
Amazon has large warehouses to deliver what the buyer wants, but Alibaba doesn’t work that way. In addition to major retailers, Alibaba receives commissions from finding placements and selling ads.
Its structure raises questions.
Foreign ownership of Chinese companies is prohibited in China, thus, the opportunity for foreign ownership becomes impossible. However, the company is listed on the United States market under the Cayman Islands. The Cayman Islands Company is also known as Alibaba Group Holding Limited.
This means that any foreigner who wants to invest in the company will be part of the Cayman Islands company rather than Alibaba. Nevertheless, due to the company’s structure, illegality is possible under the law in China.
Lack of presence in the S&P 500
US. The lack of appropriate indices to analyze the company’s stock value makes it less patronized by institutional shareholders.
Its founder has an interesting story.
Although Alibaba is popular in the e-commerce industry, its founder Jack Ma has an interesting story. In 1995, when he was on a tour of America, he had the opportunity to use the Internet for the first time. Even though he was a poor school teacher, this moment marked the beginning of Alibaba.
Upon returning to China, take advantage of using the Internet to search for business internationally by listing China-based companies. After facing failure, he stalled and emerged four years later with Alibaba in 1999.
Now, the company has grown to become a giant in the e-commerce industry, making Jack Ma one of the richest men in the world.
Since the company’s inception, Alibaba has grown in revenue as it is now the largest company in the e-commerce industry. Like other companies, you can buy shares in Alibaba. However, it is important to know the best time to buy stocks. Thus, investors are urged to study Alibaba stock forecast.