Alibaba: how marketplaces are changing the face of retail

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On September 19th, the Chinese e-commerce giant Alibaba went public after months of hype. The IPO frenzy hit the New York Stock Exchange with a share price increasing by 38% on the first day of trading, making Alibaba the largest IPO ever with a historical $25b.

Why the hysteria? Simply put, Alibaba is the biggest, most successful e-commerce company ever, with bigger transaction volumes than both eBay and Amazon combined.

The Chinese success story, which covers different online formulas, accounts for 80% of all online commerce in China, bringing the term “dominance” to a whole new level. Just to compare: Amazon takes 16% of all online commerce in the US. Alibaba counts 279 million active customers (Amazon about 244 million), enjoys profit margins of 43% (Amazon struggles to break even) and, with China’s online population expected to grow to 800 million by next year, their number of customers will see tremendous growth.
Alibaba is a giant and everyone seems eager to take a bite of it.

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