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Chinese e-commerce giant Alibaba to float in US Chinese e-commerce giant Alibaba to float in US
(35 minutes later)
The Chinese internet giant Alibaba plans to float in the US in the biggest initial public offering since Facebook. The Chinese internet retailer Alibaba plans to float in the US in the biggest initial public offering since Facebook.
Although little known outside China, the group dominates e-commerce in its home country with more than $150bn (£90bn) worth of merchandise changing hands on its platforms each year – more than Amazon and eBay combined.Although little known outside China, the group dominates e-commerce in its home country with more than $150bn (£90bn) worth of merchandise changing hands on its platforms each year – more than Amazon and eBay combined.
The company's announcement on Sunday did not give details of the timing or size of the float or which exchange it would use, but analysts have estimated it could raise up to $15bn, valuing the company at more than $100bn. When Facebook floated in 2012 it was valued initially at $104bn. The company's announcement on Sunday did not give details of the timing or size of the flotation or which exchange it would use, but analysts have estimated it could raise up to $15bn, valuing the company at more than $100bn. When Facebook floated in 2012 it was valued initially at $104bn.
The announcement ended months of speculation over where the company would list after talks for an initial public offering in Hong Kong fell apart last year. The Hong Kong exchange refused to grant Alibaba an exception from listing rules so that it could maintain a "partnership" structure, allowing its top executives – who own 10% of the company – to retain control of the board. The announcement ended months of speculation over where the company would list after talks for an IPO in Hong Kong fell apart last year.
The Hong Kong exchange refused to grant Alibaba an exception from listing rules so that it could maintain a "partnership" structure, allowing its top executives – who own 10% of the company – to retain control of the board.
"Alibaba Group has decided to commence the process of an initial public offering in the United States," the company said. "This will make us a more global company and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals.""Alibaba Group has decided to commence the process of an initial public offering in the United States," the company said. "This will make us a more global company and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals."
The company hinted that the door had not completely shut on listing its stock in Hong Kong. "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," the statement said. The company hinted that the door had not completely shut on listing its stock in Hong Kong. "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," it said.
Founded by Jack Ma 15 years ago in a one-room apartment, the company has grown to control 45% of Chinese e-commerce last year, according to Euromonitor. But that was down from 46% the previous year, with Alibaba's nearest rivals gaining market share. Founded by Jack Ma 15 years ago in a one-room apartment, the company has grown to control 45% of Chinese e-commerce last year, according to Euromonitor. But that was down from 46% the previous year, as Alibaba's nearest rivals gained market share.
Euromonitor predicts China's internet retail market will triple in value from 2012 to more than $300bn in 2018 as the country's smartphone-savvy shoppers buy everything from plane tickets to sneakers online. China's biggest social media company, Tencent Holdings, is leading the fightback, linking the country's number two e-commerce player, JD.com, with the most popular messaging app, WeChat.
China's biggest social media company, Tencent Holdings, is leading the revolt, linking the country's most popular messaging app, WeChat, with the number two e-commerce player, JD.com. An array of smaller rivals are also clawing away at Alibaba's lead, while household retail names such as Nike and Gap are increasingly striking out from the giant's Tmall electronic platform to set up more distinctive online stores of their own.
An array of smaller rivals are also clawing away at Alibaba's lead, while household retail names such as Nike and Gap are increasingly striking out away from the giant's Tmall electronic platform to set up more distinctive online stores of their own. Euromonitor predicts China's internet retail market will triple in value from 2012 to more than $300bn in 2018 as the country's smartphone-savvy shoppers buy everything from tickets to trainers online.
Alibaba Group does not report its finances, but Yahoo, which owns a 24% stake in the company, said Alibaba's revenue for the July-September quarter rose 51% from a year earlier to $1.8bn. That was down from 61% growth in the previous quarter and 71% growth in the first quarter of 2013.Alibaba Group does not report its finances, but Yahoo, which owns a 24% stake in the company, said Alibaba's revenue for the July-September quarter rose 51% from a year earlier to $1.8bn. That was down from 61% growth in the previous quarter and 71% growth in the first quarter of 2013.