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Alibaba being cautious about IPO
7
May
May
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
May
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
May
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
Apr
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.
Kuaidi Dache Taxi App Needs Funding, Brought In Alibaba
11
Apr
Apr
The fast taxi startup from China is seriously putting itself out there to secure funding for its app. The 300 000 user strong service is operational in Shanghai and Hangzhou, hopes to expand to more cities in the near future.
What's the goss?
This wonderful little app allows us to find out where cabs are and jump in them. Beijing could seriously do with an app like this as most of us can't find a cab… ever.
The app is currently meant for iPhones and Android and claims to help 20 000 people a day hail a cab.
Although funding has not actually been announced yet, there are strong rumors that Alibaba is jumping on the bandwagon and has dropped a couple million RMB as investment. Alibaba, always looking for new ways to expand its emporium, will feel quite at home in the virtual cab hailing business.
More organisation
The true genius of Kuaidi Dache is that it is harnessing one of the pressing issues in China's major cities today; never finding a cab despite there being in millions on the roads everyday. Indeed, most major cities in the world no longer rely on hailing a la Carrie Bradshaw but call or text cab companies and apps.
Kuaidi Dache claims to cover over 70% of the taxis rolling around Hangzhou and should see that number rise in the coming times thanks to secured funding.
WHEN ARE THEY COMING TO BEIJING is what I would like to know.
Competition
Kuaidi Dache is not the only app riding the cab localization gravy train. Indeed, they are facing fierce competition from Didi Dache who have actually managed to incorporate themselves into Baidu maps. Admittedly that's genius, but I still believe in our friends over at Kuaidi Dache.
The development may actually go the other way whereby a cab app could develop mapping services that already include their software. For now though, it seem there is a great scope for these type of apps to grow exponentially. Proof is right here in Shanghai and Hangzhou
Qunar In Troubled Waters With Its Merchants
10
Apr
Apr
Big travel company in China, Qunar is struggling at the moment with its 3rd party merchants who are not happy about policy change.
The risks of the e-commerce format
What is risky is the reliance these big sites have on 3rd party merchants. Indeed, heavy weight is placed on them which means that when they are not happy with the situation they call pull the plug from under us and leave Qunar in a difficult and accountable situation.
What this truly means is that Qunar does not directly supply the products and services, for a company that relies solely on these said services to survive, the gamble is quite high.
In a conflict situation like the one Qunar is faced with at the moment, the company has little choice but to yield to the demands of the merchants as they control enough of the business to damage the company.
Strengths?
What can be applauded about this business model is that everyone stays within their area of expertise when it comes to building e-commerce platforms versus providing products and services to customers.
Alibaba has had similar issues when it changed pricing and policy on one of its platforms a while ago. There again, the reliance on the model can both damage and be a boost for e-commerce sites.
Qunar needs to move forward
Despite the negative news that has been coming out this week from the press, Qunar needs to step it up and do some damage control. Issues like this will damage the image and perhaps make people think twice before they book with them. There is nothing worse than having your holiday fall through.
With an IPO in the books in the near future, Qunar can now kiss that dream goodbye until it sorts though the mess it has just been thrown in. The truth is this damaging type of scandal is enough to push the IPO back by a few years and halt the growth of Qunar.
And with Google Hotel Finder coming up behind to bite a chunk out of the market, one can hope for Qunar's sake that it fixes this mess quickly.
Realistically, it will be more beneficial for Qunar to sort this out quietly with its merchants than face more negative exposure. If Alibaba can live through this and still strive there are solutions to the problem.
Alibaba Expanding Group Buying Site to Greater China
8
Apr
Apr
As we all now know, Alibaba runs the show when it comes to the internet in China. They are now contending with groups outside of its borders by advertising Alibaba's buying site in Hong Kong and Taiwan (so not too far outside of said borders as this merely represents Greater China).
What's new?
They now have a new overseas site hk.ju.taobao.com which offers a limited number of daily deals to those crazy kids over in Hong Kong and Taiwan. For now, this new site will mainly offer deals in mother care, home ware, clothing and electronics. Offers in travel and lifestyle will happen in a couple of weeks time. Obviously, they can't get all the fun in one go.
What is interesting in all this is that Groupon is already present in Hong Kong and Taiwan where it has healthy business. Considering how this company has been faring lately, I would be quite worried if China e-commerce dragon was arriving on my shores (apologies for the all too easy reference to China as a dragon).
Who owns what?
Recent research has placed Taobao's Juhuasuan as dominating 47.8 percent of the group buying market, thus placing it way ahead of other companies offering the same type of deals.
Where taobao is also putting the ball in its court is when they offer their websites in traditional characters, directly interesting for residents of Taiwan and HK.
Furthermore, there is news that Alibaba is strongly hoping to expand its business throughout South East Asia. For that though, they will be forced to translate the websites into english as Chinese may only take them so far in this region of the world.
The future is Alibaba
In a bold move, Alibaba's Juhuasuan is promising its overseas customers to deliver items in less than 2 days. Now this is perfectly feasible within China thanks to discount kuaidi services but this may prove more difficult when longer distances and international borders are involved.
Mastercard Wooing Alibaba Group
1
Apr
Apr
The global credit giant, MasterCard is hoping to develop closer ties with Chinese tech giant Alibaba, and more precisely their online payment service. Here is hoping they can push the development on mobile payment worldwide.
The focus will remain on e-commerce, thus pushing into Alibaba's area of expertise. However, as this field expands there could be scope for more daily mobile payment options.
What's in store?
Both companies have now signed a Memorandum of Understanding, a non-legally binding agreement that shows intent from both parties that a common line of work will be pursued together.
What this means for us is that both companies do indeed wish to work in conjunction but have not yet reached any decisions as to how. Thus, for now we can wait to see how the two companies will find common ground to work on.
Who is gaining what?
MasterCard has shown a willingness to expand itself into the Chinese consumer market. It therefore does not wish to export Alibaba services to the rest of the world…yet.
Alibaba, on the other hand would gain massively in credibility and safety if it were to take on a partner like MasterCard. Indeed, we are all rather wary when it comes to using our banking details online, so an internationally recognized name such as MasterCard could do wonders for e-commerce payment methods.
Good news for all
On the day of the news, MasterCard's shares were up by 0.6% which shows support and excitement for this new potential link. Investors will continue to pour their money (wisely) into China and its big e-commerce platforms.
There is a hope that as these forms of online and mobile payments develop and expand that our daily lives will incorporate small purchases through the use of phones and tablets. One can only dream of the day where Beijing travelcards can be used for more than just transport.
Alibaba Attracting Foreign Press
27
Mar
Mar
This week's issue of The Economist has put Alibaba on its cover. This is most likely the first time its readers have heard of the company. The article set out the place Alibaba and China holds in the e-commerce world as well as some thoughts on the future of the company.
What does The Economist have to say about Alibaba?
For those of you who are not avid readers of this weekly news magazine (my mother used to read it to us at bedtime), The Economist is a somewhat liberal magazine and has in recent years broached more into technological advancement in the world, and has since summer 2012 ran weekly stories on China. Most likely because we are just too important to ignore.
After explaining the rise of Alibaba and who Jack Ma is, the article claims an IPO is expected to be announced. Now, there is a little jumping of the gun here as there have been mere rumors about the IPO but nothing concrete has been announced.
The global future of the company
If Alibaba is to succeed in its Initial Public Offering it must not replicate the mistakes of Facebook. According to the Economist, it has the potential to become one of the leading tech companies in the world. And this is coming from a weekly news magazine that has been running since 1843.
One of its true strengths is its capacity to grow much more than it is at the moment, not only has it not reached the entirety of the chinese market, but it stands good ground to move onto the international scene.
Taobao could be bad news for ebay if the company do indeed manage to push their way into ebay's part of the market.
Risks for Alibaba?
An interesting part of the Economist's analysis is that it points out where the downfall could be if Alibaba does not play its cards right. Indeed, the magazine sets out two ways in which Alibaba could come tumbling down.
The curse of online shopping in China is that one is never sure about reliability of the products and where they have emerged from. Beyond the obvious references to fake goods, another is dubious origins. Indeed, whoever is at the helm of the company will need to ensure the company does not go too far in its expansion without being able to ensure the quality of products on its site, to a certain extent (italic).
Another risk is the backlash from foreign companies. We always treat with suspicion something we don't know and to all intent and purpose, companies do not know anything when it comes to new firms such as Alibaba. They are therefore more likely to band together and treat them with suspicion in a sort of "better safe than sorry" mentality. Luckily, Alibaba has a positive, if not absent, international image.
Nothing secure
Although we must tread carefully when talking about the rise of Alibaba (and with that the rise of China). You can quote me in saying that Alibaba will still be around for a while, creating more wonderful services such as Alipay which make our daily lives easier and more tech savvy.
It is now crucial to follow the decisions made by Jonathan Lu, the new man in charge of the company. As the moves he makes in the years to come will either announce the tumbling of a company with great potential or see its growth rise up through the world ranks.
Stay posted!
Alibaba's New Mobile, Cardless Credit
14
Mar
Mar
Alibaba has very generously developed more ways for us to spend money we don't have, and accumulate debt. Three cheers for Alibaba!
The latest news to come out of the internet giant is that it is testing a new mobile service that allows people to pay for things on credit through the medium of their smartphone. All outstanding credit will then be paid through normal debit card. Genius I tell you, it's like a glorified version of an oyster card with a big scare at the end of the month.
This service will start out solely in Zhejiang and Hunan provinces for now, if the test trials go well there, they will expand to the rest of China.
This new service is being pioneered by Alibaba Small & Micro FInancial Services Group led by former Alipay CEO Peng Lei.
How does it work?
APPARENTLY, the service works like this: the buyer purchases something and a commission of between 0.8 and 1 percent is added to the price. Said buyer then has 7 days to clear the outstanding amount.
The customer's history of payment does influence how much credit he or she gets. This means that info such as how good you are at paying you debts off alipay and what not come into the fore.
If you don't pay your outstanding balance within the year, your Alipay account is deactivated and NO MORE SHOPPING ONLINE. The thought alone petrifies me.
Alibaba has announced that it will be hoping to develop partnership with commercial banks, thus developing a more sound credit service to go alone with the mobile payment service.
Data banks
Former CEO and current Chairman of this glorious company, Jack Ma has claimed that the future of the internet lies in data mining and financial services. Something he is trying to link together by offering banks a peek into Alibaba's consumer information.
Will these new services shimmy in a new era of virtual money and smartphones as the basis for everything?
Is this all safe?
Although may use this argument for credit cards in general, I would feel somewhat worried about no realizing how much money I spend and then realize I owe thousands of RMB to the bank!
But not only that, what about safety and data protection on our phones? Mobile internet just seems to exist in the ether without us ever really worrying about who actually has access to our information.
However, if the credit levels stay low and it does not encourage people to spend recklessly then there's a lot of good to say about what Alibaba have developed.
