Alibaba’s IPO: A look back at China’s largest Ecommerce company

On the verge of on upcoming IPO we thought it would be a good time to look back on China’s

On the verge of on upcoming IPO we thought it would be a good time to look back on China’s most successful Ecommerce company, Alibaba, and see how it captured 80% of the largest Ecommerce market in the world.

Alibaba joined the Ecommerce trend early on back in 1999 and was founded by former school teacher Jack Ma. Its initial offering was Alibaba.com, a B2B portal connecting Chinese manufacturers with overseas buyers.

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Shortly after the launch of Alibaba.com in 2003, the firm launched the Taobao marketplace, an eBay like service allowing local Chinese merchants to sell directly to local customers. Taobao, as with other services and platforms of its kind saw raging success and brought upon the release of its own payment system in the form of the now popular Alipay.

Alibaba founder Jack Ma
Alibaba founder Jack Ma

Alipay launched a year after Taobao and offered merchants free registration and commission-free transactions using the third-party payment platform. Alipay has since become the most used payment service in China, offering online and mobile payment options to a plethora of physical and online services and products.

The heightened popularity of Taobao and Alipay brought upon a companion service to the popular marketplace in the form of Tmall. Starting as a section of Taobao, Tmall offers brand-name retailers and importers the ability to sell its products and services online. Tmall was spinned off into its own standalone service in 2011 and since has become the official online outlet for leading brands such as Apple.

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Taobao and Tmall have become the most used online Ecommerce platforms in China and have contributed to global record sales days. This last Single’s Day (AKA 11/11) saw sales reaching $5.75 billion in a 24 hour period from Tmall and Taobao alone.

Given its growing success in the mid 2000’s, internet giant Yahoo! invested $1 billion in Alibaba back in 2005. As a result of the investment Yahoo! now owns 40% of the company. Yahoo! is China’s second largest search engine after local Baidu and is a pioneer in site banner and other online advertising techniques which helped contribute a sizable bulk of Alibaba’s earnings. The partnership has helped Alibaba make its way out of China by offering payment services in Japan and Taiwan.

Alibaba's Headquarters located in Hangzhou, China
Alibaba’s Headquarters located in Hangzhou, China

Local success brought the need to branch outwards of China and in 2010 Alibaba launched AliExpress. AliExpress offers an online marketplace to give local Chinese merchants the ability to sell outwards of China to the rest of the world. The push to offer RoW services came after eBay had begun offering Chinese sellers the ability to sell to customer Worldwide. Alibaba is continuing to launch services outside of China and recently unveiled 11 Main, an upscale marketplace targeted at the US market.

While local competition in the form of Tencent and JD.com has tried to catch up to the Ecommerce juggernaut, nothing can deny Alibaba’s place as the largest Chinese internet firm. With support and services spanning over internet, mobile, cab hailing, mPOS solutions, vending machines, and money transfers, the upcoming IPO might be what Alibaba needs to spread its reach even farther.

 

Images courtesy of Wikimedia and Wikipedia

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