Alibaba boasts of impending $140bn US IPO as e-commerce dominance dips

By Peter Gothard
17 Mar 2014 View Comments
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Chinese e-commerce giant Alibaba has announced an intention to float on the US stock market, with some estimates valuing the company at around $140bn, with the listing itself predicted to make profits of $15bn (£9bn).

It might be a good time for the company, which began in founder Jack Ma's single-bedroom apartment 15 years ago, to make a play for public offering, as indications are the firm's share of the online transactions market is contracting.

Further reading

While Alibaba still controls 45.1 per cent of China's entire e-commerce market, it held 46.1 per cent in 2013, according to market research group Euromonitor.

This still equates to around 500 million customers and 800 million product listings for the e-commerce goliath.

Alibaba's offerings in the mobile e-commerce space are thought to be its main weakness, as Chinese shoppers - like the rest of the world - increasingly use smartphones to make transactions.

Since its inception in 1999, Alibaba has also had to start taking on bigger rivals such as Wal-Mart, which operates in China as Yihaodian. Similar Chinese shopping networks such as JD.com and Tencent are also major players in the space, and only days ago announced an alliance that saw Tencent buy a 15 per cent stake in JD.

Niche traders such as cosmetics firm Vipshop Holdings are also making a dent in Alibaba's market share.

Alibaba also runs B2C Chinese-language web shopping hub service Tmall, which many traders are now apparently beginning to move away from as they sell to web customers from their own digitial services and branded websites.

IPO "will make us a more global company and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals," an official statement from Alibaba explained, while the company still refused to cite a specific date.

Alibaba had been in talks for a Hong Kong stock offering in 2013, but discussions with regulators failed due to the company's decision to let senior executives retain control of the board of directors, which contravened Hong Kong's listing rules.

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