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Alibaba Could Become A Bigger Threat To Distribution Than AmazonSupply

Sections of this story were reported by the Associated Press, which has an agreement with tED magazine to re-publish AP material.

NEW YORK (AP) — Alibaba, an online e-commerce website that rivals Amazon.com, now plans to raise up to $25.03 billion in its upcoming IPO, making what was expected to be the biggest stock market debut even bigger.

And that can mean another threat to our traditional electrical distribution supply chain.

The Chinese e-commerce company said it still plans to sell 368.1 million shares, but at $66 to $68 apiece, according to a regulatory filing, instead of its previously set range of $60 to $66 apiece.

Alibaba Group Holding Ltd. has emerged as a hot commodity because of its e-commerce bazaar, a shopping magnet for businesses and consumers alike as China’s economy steadily grows. The company’s network of sites includes Taobao, Tmall, and AliExpress, as well as Alibaba.

Here is what we have learned about Alibaba in the past few days.  Experts have described it as a combination of Amazon.com and eBay.  It is not extremely well-known in the United States, but it is expanding.

And, it has Wall Street buzzing about its capability to sell B2B, and even give AmazonSupply.com a run for its business money.

If the IPO goes as planned, Alibaba would have a value around $167 billion, which is slightly more than Amazon.com’s $160 billion value.  That will allow Alibaba to acquire a huge amount of cash, which can be used for research, mergers and purchases.

Alibaba describes itself as the “largest online and mobile commerce company in the world.” It claims the value of all of the merchandise on the site is around $248 billion, compared to Amazon.com’s $116 billion.  That also makes the value of the merchandise on Alibaba more than Amazon, eBay, JD.com and Rakuten combined.

To quote Vivak Sood of Eye For Transport, “Nonetheless, nobody knows what will happen in future. AmazonSupply, Alibaba, or B2B exchanges, could become so powerful that they will suck small players into their enormous vacuum of suppliers. The process can even accelerate if trust keeping mechanisms are built into B2B exchanges.”

Most of Alibaba’s 279 million active buyers visit the sites at least once a month on smartphones and other mobile devices, making the company attractive to investors as computing shifts away from laptop and desktop machines.

Investors have been salivating over the trifecta of growth that Alibaba offers: “There are very few companies that are this big, grow this fast, and are this profitable,” said Wedbush analyst Gil Luria.

The company’s revenue in its latest quarter ended June 30 surged 46 percent from last year to $2.54 billion while its earnings climbed 60 percent to nearly $1.2 billion, after subtracting a one-time gain and certain other items.

Alibaba has been meeting with potential investors over the past week, and demand spurred the increase. Alibaba is expected to be priced late Thursday and start trading Friday under the ticker ‘BABA’ on the NYSE.

 

 

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