alibaba

China's e-commerce Giant Running for US IPO

31
Jan
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In the insane yet lucrative e-commerce market that is China, one does not relax for long at the top. For those in the rat race, the need to constantly move upward is the only way to stay alive. With this in mind, JD is crossing the pond to the US for an IPO in the new year. 

 

JD and the e-commerce race

 
JD.com used to be known as 360buy before it revamped its image last year in a bid to secure its rise through the ranks. What came out of that is now the current second largest e-commerce platform in China and quite possibly the world. Indeed, when we look at the outstanding success of e-commerce in China, it is not difficult to see why they are so successful and why everyone wants a slice of the consumer cake. 
 

Why is e-commerce so successful? 

 
In the early years of Ebay, we used to shop for things a little harder to find on the high street or if we were looking for bargains. Although, Western attitudes to shopping online have changed and grown as well, China is special for different reasons. 
 
First of all, much of the country is miles away from the rest of the country. It's therefore normal that large portions of the population may not have access to a large array of shops (especially those living in the countryside). It makes therefore much more sense to shop online when there is such a greater selection of products. 
 
Second of all, China has a much younger relationship with shopping and consumerism in general than the West does. Its attitudes have been shaped around e-commerce much earlier than the West. China has incorporated it into its shopping habits differently. 
 

JD's success story

 
Although Alibaba is still top dog in the e-commerce game, mainly thanks to its vast array of services alongside it's actual shopping sites, it is still possible JD may overtake them in the near future. 
 
JD has filed for an Initial Public Offering in the US and hopes to raise close to $1.5 billion in funds. in order to support their claim, they have announced an active user population of 35.8 million and over 25 million products for sale. 
 
Their strength is having their own delivery service that ensures the products reach the front doors of China's e-shoppers. 
 
It turns out that the company has already managed to raise over $2.5 billion in funding over the course of the last 6 years and is hoping the extra cash over this year will help it reach the IPO goal in the US. 

Alibaba Launches Games for its Mobile Platforms

30
Jan
Alibaba.com logo

It's a showdown people, and the game just got real. Two internet superpowers are squaring up to each other in a bid to secure movement on their respective areas of expertise. What are we fighting with today? Mobile gaming! 

 

Alibaba's cunning plan

 
These games are hopefully going to develop customer retention for Alibaba's e-commerce sites such as taobao and tmall through the mobile apps. 
 
The group have developed three games, including one with in-app purchases. They can be accessed either through the social messaging app called Laiwang or via the Taobao mobile app under the "My Taobao" page. 
 
According to the experts, the games are similar to Candy Crush and therefore fit a larger spectrum of audience. Indeed, these are games that we can pick up at any time on the go and can be a good method for attracting new audiences and keep them on the platforms. 
 

Alibaba vs. Tencent

 
I am not actually sure when these two cats became rivals considering they sell completely different things. However, it seems that the internet is playing tricks on all of us and mixed up all the mediums. 
 
If we are to believe recent reports claiming that young people are spending less time of older types of sites and more time on Wechat, snapchat and other mad fun places then perhaps this explains the merging of activity. It does not seem so strange that we are spending money through a game on an e-commerce app and buying stickers through a messaging app. After all, if it works as a model then just go with it and see how it develops. 
 
When it comes to the rivalry between these two firms, they are definitely battling it out to the end with their respective launch dates. Indeed, as Wechat makers Tencent released their latest version 5.2, Alibaba were launching their brand new games. 
 

The future of gaming?

 
Both are using games to develop and retain their customers despite them both selling different products and services. 
 
It will be interesting to see how Alibaba plans to develop their gaming platform and to what extent they hope to use it to promote their other products. Indeed, some may question how far mobile games can help to get people to shop online. 
 
On the other hand, gaming through a messaging app makes more sense although it is equally unsure how to effectively monetize these services. 

Alibaba's Founder Becomes Sponsor for American Science Prize

27
Sep
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Now that Jack Ma is not as involved in the daily runnings of the world's largest e-commerce platform, he has some time to relax and enjoy life as a squillionaire. However, Sir Ma is not taking any time off and is spearheading the Chinese Philanthropic Society. 

 

China donating to America

 

Indeed, the Breakthrough Prize in Life Sciences is a bursary of sorts handed out to groundbreaking scientists working in scientific fields aimed at curing lifelong diseases around the world. 

 

There are 6 awards to be won worth $3 million each. But beware, the money is not to be squandered on online shopping but should be used to fund the research and the equipment needed to do so. 

 

A new phase of China's growing influence

 

Obviously, all of us here have known for some years that Chinese founders of major companies are clearly the new leaders of tomorrow. China is capable of producing original and solid products aswell as services (Wechat anyone?) to the same level as those offered in the West.

 

Beyond that, South East Asia is now the fastest growing market for smartphone sales which also leads to a growing pool of tech inventors, creators and marketers hoping to push their region to become as dynamic as the US. 

 

Jack Ma as the new face of China?

 

How does this link to Jack Ma's new endeavor? Well it shows to the rest of the world that not only does China have the cash to fund these sorts of initiatives, but it is willing to partake in using exhaustive personal wealth for the advancement of science and global health. 

 

Although it is policy makers who in the end make the decisions about where the country will go, we cannot hide from the fact that businesspeople and public figures have as much of an influence on the country's image as politicians do. Mark Zuckerberg (who is, incidentally, also one of the sponsors of this prize) is famous all over the world, as is the late Steve Jobs. Perhaps in a few years everybody will recognize the face of Jack Ma and what he represents. 

 

Tech as the future of China and the region?

 

Although everyone's favorite game is to announce the demise of China as it falls into a deeper circle of hell along with North Korea, there is an overlook at how much creativity is coming out of these borders. The tech giants and smaller start-ups could be the drive to get the region over the difficult transitions its going through.There will be no downfall anytime soon and the current tech scene is enough to illustrate this point. 

Taobao Moves into South East Asian E-commerce Game

24
Sep
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One of the largest e-commerce sites in the world, Taobao has been extremely popular in China since its launch a few years ago. It has now been planning its regional expansion by moving southwards to the money bags of Singapore and the rest of South East Asia. 

 

More expansion for Taobao

 
It turns out that the site has already wooed 280 000 customers in Singapore as claimed by their Director of Taobao International Business, Daphne Lee. Perhaps most of it is coming from the Chinese diaspora living down there in the city-state. As we know Singapore and China have strong cultural and linguistic links. 
 
Most of the growth apparently is coming from organic search. No SEO splurging from Taobao then? It seems to be working for them though. 
 
In other places, Malaysia seems to have raked up 210 000 Taobao users on the new site which promises good things for the rest of the region. 
 

Multi-lingual Taobao?

 
How are all these populations surfing the e-commerce platform when they all speak different languages? 
 
Up until now, Taobao has been a Mandarin affair when it was still a domestic site. It turns out that the firm are working on different languages and a dual-language sign-up page will be available in the coming weeks. 
 
Furthermore, a hotline has been setup in Singapore to help those not literate in Chinese characters yet. However, this will not hold out long as customers will not lose their time on a website that is not accessible to them without Google Translate. 
 
There are, however, partial translations of the site but this does not extend to product descriptions which can prove to be a little complicated when buying products online. But maybe that's just being picky. 
 

What about postage? 

 
We all know that the one iffy point about e-commerce is how to get your purchases to your door without paying through your nose. This is compounded when said e-commerce site is actually in a different country… one of the largest countries in the world. 
 
Taobao have thought ahead on this one and now offers a deal with their logistics partner that delivers parcels to Singapore without having to deal with national postal services or informal deliveries systems. 
 
The company already offers this service to customers in Hong Kong, Macau and Taiwan so it is only a matter of extending it and does not require a new platform. 
 
For those of us always looking for a cheaper service, they also offer a group delivery option which takes longer but cuts costs down through large deliveries. 
 

The future of the Alibaba Empire 

 
There are now 1.4 million users in Hong Kong and along with the growing numbers in the rest of South East Asia, it promises large scale expansion for the Alibaba group and its many e-commerce platforms. 
 
This year, Alibaba has generated profits above $170 billion which will mainly be coming from China and South East Asia. In comparison, Amazon turned over $61 billion and they have a more worldwide network. 
 
Brick and mortar still takes the cake though with a $447 billion turnover from the Union-denying fat cats over a Walmart. 
 
Observing the expansion of population and territory size in China and SEA, there is a case to be made about the promises of e-commerce over physical stores. 

Sina Weibo on the Decline in China

12
Jul
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NEWS FLASH: Sina Weibo has passed its peak, much in the same way Nokia has…some may claim. 

 

500 million users doing what?

 
Although the specialists of the short messages still claim loud that the service has 500 million users, it turns out that only about 47 (million) of them post daily. That already puts the reality into perspective quite a lot I should say. 
 
On top of all this is the very true fact that there are less and less people using the service on a daily basis. Indeed, what used to be ubiquitous and a potent symbol of China's advance into 21st century technology has been dropped for other activities I suppose. 
 

Where are the people?

 
This is not particularly bad for the Chinese tech scene as users are simply moving on to other platforms and services such as Wechat.
 
According to the figures of an internet survey, it turns out that the golden age of Weibo was during the summer of 2012. After that the service has been on a slow decline in the number of people posting and new users. 
 
Since 2013, there has been a reduced number of people apart from a few peaks which can be accounted for, such as the panic about getting tickets home for the Chinese New Year as well as the grief and bereavement caused by the Ya'an Earthquake which happened in April of this year. 
 

Changing social trends

 
So why are we seeing a slowing down of Weibo activity? Perhaps, it could have something to do with the rising up of other, more fun things to do on the internet. 
 
We should have to assess why people used Sina Weibo in the first place and then understand if using services such as Wechat can actually replace the microblogging site despite not having exactly the same functions. 
 

Alibaba's mistake?

 
China's gigantic e-commerce firm had invested $586 million in Sina Weibo not that long ago. It is difficult to imagine the company did not check the waning activity of the service before purchasing an 18% stake. Perhaps Alibaba has noticed some potential where some of us can only see facts and figures. 
 
It will be interesting to find out if Sina Weibo is indeed on the terminal decline or if it could still rise up again. Further, will Twitter go down the same road or are we too in love with our microblogging site in the rest of the world?

Alipay Now Selling Railway Tickets

7
Jun
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Only when one lives in China does one understand the true importance of being able to purchase train tickets online. Many of us in the world take buying our train tickets online for granted where it has been normalized for many years now (although I still have my reservations about National Rail as an efficient company but more on that later). 

 

Train tickets in China

 
For a long time in China, traveling by train means sacrificing days out of one's life to reach our destination; worst still was actually buying said tickets. 
 
Recently, the official people in charge of railways in China have developed an online platform for train tickets, however this was still very limiting and didn't cater to everyone's needs. 
 

Alibaba's foray into new e-commerce. 

 
For those of you who have not heard: the giant e-commerce company Alibaba who own Taobao have developed a Paypal type service that allows us to make online and electronic payments in China. We recently learnt of a method for buying subway tickets through Alipay
 
Newest development is train tickets. Indeed, Alipay has won the bid from the China Railway Investment Corp making them the official third-party partner for train ticket buying online. 
 
This is good news for everyone as it will further simplify and streamline buying those god-forsaken tickets without enduring hours of queueing in the train stations or crashing websites. 
 

China online

 
This move shows a willingness from the central authority to modernize their services as they realize it will help deal with what can be a major problem in China where the majority of the country still travels by train. 
 
We know that the private sector is massively tech-savvy with former shopping centers turning 180 degrees towards the internet (Suning) and the literal explosion of e-commerce with shortening delivery times all over the country. 

Alibaba being cautious about IPO

7
May
Alibaba.com logo

The great Alibaba is seriously considering an IPO as the next logical step for a company in this position. The e-commerce mammoth will be looking at launching an IPO within the next few years - although this could be moved forward quite briskly if the circumstances are favorable.

Treading carefully

The biggest fear for Alibaba is that there is a nuclear war and the internet is cut off all over the world. Their second biggest fear is that they end up like a certain social media site who got a little too greedy.

If the IPO is too high, it will be boom and bust and before you know it shares will have dropped tremendously.

With the latest purchase of a stake in Sina Weibo, Alibaba does have very serious plans to become one of the leading tech companies in China and challenge such groups as Google and Facebook.

Projections

Increase projections are estimated to rise by 59% in the next year. Something that is unheard of in the West and gives an idea of where the company is heading.

Our faithful analysts have estimated Alibaba's wealth at the USD100 billion mark. Coincidentally, this is very close to what Facebook was valuated at just before its own IPO.

Danger

However, in order to play its cards right, some experts suggest Alibaba undervalue its selling price so as not finish like Facebook did not long after its initial IPO.

Some have hinted at a valuation close to the USD60 billion which is more conservative but runs the risk of under-selling what is the largest e-commerce platform in the world in the country with the most internet users.

If all goes well, this valuation for the IPO could be a sure fire way to not fall into the Facebook trap as investors will want a part of the e-commerce giant whatever happens.

The future

The truth is that for now, nothing has been officially pronounced by the leaders of Alibaba. An IPO in the future has been mentioned but the speculation about it being in the next 18 months is in no way confirmed.

Needless to say, those in charge will not repeat the mistakes made by others in the past and will ensure that whatever move is made will the smartest one possible.

Qihoo's vision to expand beyond China, is it feasible?

6
May
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Qihoo CEO Zhou Hongyi has his sights set on the world lying the other side of the Chinese border. In tech talk that literally means the whole planet and then some.  Despite these adventurous ideas, there is no certainty the company can survive and thrive in the international market. 

 

Qihoo and the chinese image

 
The biggest obstacle Chinese companies are faced with abroad is that of image. The truth has little place in this equation but already, big companies like Huawei and ZTE and learning that being from China does come with a few pre-conceptions from the folks in the West. 
 
Hacking scandals have not helped the situation any better, and when it comes to anti-virus software such as the ones Qihoo has developed, it becomes a no-go for those who are weary. 
 
To add to the injury, Qihoo does not already have a top notch reputation in China itself AND has as its main competitor the big scary Baidu
 

Bad PR? 

 
When one thinks of Alibaba's leader, one sees the cheerful face of Jack Ma which makes us believe, even for a split second that the company is run by a lovely man. Whether this is true or not is not crucial when it comes to company images and brand but can still play a role when there is much bad press. 
 
The problem with Qihoo is that its dear leader loves a good brawl. Indeed, the company has been enthralled in numerous legal battles because of Zhou Hongyi tendency to post crazy things on Sina Weibo and starts fights like a footballer hopped up on steroids. 
 

What are the positives?

 
We must not forget that Qihoo currently holds a majority stake of the antivirus market in China. With one of the largest online communities in the world, that is not something to be snubbed at. 
 
Furthermore, although the West is all scared about trusting us in China (babies!), there is a large and growing market in South East Asia that may be easier to swing in the direction Qihoo wishes it to go. 
 
As the market is not so mature over there, there is also less competition from established software companies selling the same products. 
 
However, Qihoo better act quick as the South East Asian tech startup scene is one of the most dynamic in the world today. 

Alibaba buys Sina Weibo, Shocks the World

1
May
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It may be time to begin a new section on this blog, it should be titled "Alibaba World Takeover." I feel a new tag being created. 

 

The News! 

 
While we were all busy following with excitement the abdication of the Netherlands' Queen (said no one ever), Alibaba was sneakily buying up stocks in Sina's Weibo
 
The USD586 million cheque gives the giant e-commerce platform an 18% stake in the country's largest microblogging service. 
 
This venture into social media is a big step for Alibaba who have not yet made any steps in this direction. In classy world dominating form, they chose to start this venture by buying up the largest, most important microblogging service in China. 
 

Is Sina Weibo a good buy?

 
The real challenge now will be to see if Weibo was worth the investment. Indeed, speculation that the site has already reached its peak are abundant and perhaps not all wrong. 
 
As Alibaba is such a leader, this may be a blessing for Sina if they do indeed believe some new blood needs to be pumped into the platform. 
 

New forms of Social Commerce

 
Apparently the future is in social commerce, the way in which smart marketing has combined the two favorite things we like to do on the internet: social media and buying. 
 
Indeed, if this is the case then this purchase by Alibaba will come as no surprise to anyone. 
 
Alibaba has also been putting its money in different areas including a flirting app (what?) and a music streaming site. 
 
All in all, Alibaba is moving forward with its expansion and hoping that Weibo will enable it to become a multi-performance company leading the chinese pack to global dominance. 

Alipay Launches Cardless Payment System in Beijing Subway

15
Apr
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The Beijing underground system is about to get much more with the times now that online payment system Alipay is testing out its new smartphone-as-ticket service in one of Beijing's most used lines. This system could revolutionize how we deal with money in this city and make Alibaba a true leader of the tech industry in China. 

 

Beijing of the future

 

Now the sources are not actually clear on whether the person receives a physical ticket or if they just carry the information on their smartphones which is then scanned at the gates but the gist of the story is that cardless, cashless payment is now available in China. 
 
In order to use the service, Chinese users need to have an account with Alipay and then open up the mobile app on their smartphone and hold it close to one of the sensors in the Beijing subway. From that point on they have paid for their ticket and can make their way onto the train. 
 
Apparently, the smartphone makes the sound of a choo choo train once the transaction has gone through. Admittedly, one would need to hear this sound in person to see if it is indeed like a train. 
 

The new money?

 
For now there are two of these sensor machines on Beijing's line 4; there are plans to expand onto the rest of the line in the coming months and throughout the subway system later on. Much like the Octopus card in Hong Kong, the system could be expanded throughout Beijing's shopping centers, convenience stores and maybe even the malatang joint round the corner; here's hoping. 
 
If this service was to take off, it would cement Alibaba as a successful and leading company in China's tech world. Indeed, they would find themselves controlling a payment system that is not only massive in the e-commerce environment but would also be used daily throughout the city with people using it to pay for transport and chewing-gum. 
 
For a country like China that is still heavily reliant on cash, this type of technological development could do wonders to move to a safer and more secure form of payment. If there were substantially less fake notes flying around, we'd all be better off. 
 
For now though let us not get ahead of ourselves. There is a strong chance that cash will be around for a long time still.