Alibaba’s IPO Sees Chinese E-Commerce Giant Valued at $187bn

It’s been a long road to the top for Alibaba‘s Founder, Jack Ma, but with today’s initial public offering (IPO) on the New York Stock Exchange valuing the company at US$167.6 billion (that’s AUD$187 billion), it’s fair to say the entrepreneur has made it.

The valuation is in fact higher than Amazon‘s market capitalisation by some US$17.4 billion, marking a major shift in the global e-commerce market. Perhaps beyond e-commerce as well, as we begin to see a shift in high value companies begin to tilt from West to East.

The announcement may also cause some churn in the stock markets as investors are now presented with a credible alternative to Amazon. However, it’s important to note that Amazon maintains the top position for revenue, with sales reaching US$74.5 billion last financial year. By comparison, Alibaba drew in just US$8.6 billion.

What investors will be looking at most closely is the growth rate of each company, and it is this metric that has seen Alibaba valued significantly higher than its US homologue. This is in part due to the rising Chinese economy as well as the increasing growth of internet penetration throughout the region. By comparison, the US is much more mature (read: stable) market.

Alibaba’s Founder is now worth US$15.6 billion according to Bloomberg’s Billionaires Index (at the time of writing), placing him at the top of China’s most wealthy individuals.

To illustrate more clearly some of the differences – and the similarities – between Alibaba and Amazon, Smart Intern China created the following infographic.

Smart Internet China infographic
Infographic: Alibaba versus Amazon.

Ma has stated previously that he expects Alibaba to survive for at least 102 years so that it might span three centuries. However, what’s more important is whether this company rises to meet its investor’s expectations in the coming decades.

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