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EBay and Amazon beware, Alibaba’s coming IPO means time to protect home turf

Alibaba

EBay and Amazon beware, Alibaba’s coming IPO means time to protect home turf

The world’s biggest e-commerce company is set to go public in the world’s biggest retail market, the latter is true at least for now. Alibaba announced its decision to “commence the process of an initial public offering in the United States” on Sunday.

After last year’s failed attempt to persuade Hong Kong, Alibaba turned to the US for what set to be the biggest IPO since Facebook’s 2012 feat.

The Chinese giant will work with Credit Suisse Group AGDeutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. in finalising the IPO, which could launch as early as April.

“Alibaba has evolved from a company selling two dozen items back in 1999 to a truly 5-star business network, with a transaction volume bigger than Amazon and eBay combined in 2012.

The essence of Alibaba’s success lies in its super network, connecting millions of consumers, retailers and suppliers. Its value addition strategy has moved beyond synergy and into something known as value synchronicity”,

said Vivek Sood – CEO of Global Supply Chain Group.

Analysts expect the e-commerce giant to raise around US$15 billion, making it the top 4 biggest IPOs ever behind Visa, General Motors and Facebook

The company also signaled its intention to list in China. “Should circumstances permit in the future, we will be constructive toward extending our public status in the China capital market in order to share our growth with the people of China”, Alibaba said in a statement.

Global Supply Chain Is So Famous, But Why?

Worth as much as US$200 billion, behind Google in the Internet field, Alibaba boasts annual profits five times those of Amazon last year after increasing its revenue by 61% and gross profits by 71%.

Serving more than six million retailers and 300 million consumers worldwide, Alibaba’s empire extends beyond its well-known e-retail operations on Taobao and Tmall sites.

Global Supply Chain Will Make You Tons Of Cash. Here's How!

The company also has its affiliate payment system Alipay, comparable to EBay’s PayPal, as well as financial services, logistics, mobile phone operating systems and TV set top boxes.

“China will soon become the world’s biggest retail market and Alibaba’s US IPO will lay a crucial springboard to gain a bigger share of the pie in China, which is currently 5%.

The Shocking Revelation of Global Supply Chain.

Amazon, whilst still upheld as a prime example of a 5-star business network, should level up or risk being outwitted in the game,” said Sood – the author of widely acclaimed book “The 5-Star Business Network”.

Sheer number of consumers, and their increasing purchasing power provides the fuel to Alibaba machine. Combine these numbers with the fact that in most cases Alibaba is not replacing a traditional business model, but rather

creating blue ocean new business models and you can see the immense potential of the company.

All You Need To Know About Global Supply Chain.

Now combine that with the access to the producers and understanding of production economics and you can truly see a challenging behemoth emerging.

It remains to be seen whether Amazon’s consumer understanding will trounce the above advantages that Alibaba enjoys.

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About the Principal Author of Outsourcing 3.0 - Vivek Sood

Vivek Sood - Author Outsourcing 3.0

Today, Vivek and his partners are among 20-30 people on Earth who have this deep understanding of supply chain systems, practices and tools. CEOs, COOs, executives and Boards call them in the most challenging situations once they know the full potential of supply chain based transformations. Following are key milestones in Vivek’s journey:Started in 1983 as a merchant navy cadet at 18 years age, and worked his way to qualify as a Captain – qualified to take command of any merchant ship, worldwide.

  • Earned a top tier MBA from UNSW at the top of his class.
  • Joined highly regarded strategy consulting firm Booz Allen & Hamilton, consulting to the CEOs, Boards and senior management of global corporations within Australia.
  • To learn and specialise in the supply chain – against all odds, sought out the co-inventor of the supply chain in Germany and convinced him to be a partner in his firm, GLOBAL SUPPLY CHAIN GROUP, launched in January 2000.
  • More than 500 successful blue-chip projects with high impact business transformations in large corporations using the full power of SUPPLY CHAIN MANAGEMENT.
  • 4 Seminal and path-breaking business books IN SUPPLY CHAIN MANAGEMENT – these are available in bookstores and universities, and libraries worldwide.

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