As discussed with Leland Miller on Monday, Alibaba is an interesting business, with a multi-faceted, global platform. The company proved on November 11th (known as Single’s Day in China) the global reach and popularity of the company, generating $14 billion dollars in revenue in a mere 24 hours. Alibaba integrated over 20,000 non-Chinese retailers for the event, and “cross-border gross merchandise volume (GMV) generated in the first two minutes this year exceed the total cross-border GMV generated during the entire 24 hour period last year” (Stifel Equity Research). The non-Chinese brands were a very important part of the event, as it gave the firm the opportunity to introduce Chinese consumers to a plethora of international products.
Alibaba’s CEO Jack Ma noted that the company is pushing to generate 50% of its sales from outside of China, noting that the Chinese economies slowdown could lead to decreasing user growth and sales. As Mr. Miller noted, the most intriguing part of the company’s business segments is its online bank (known as MYbank). The online banking service has no physical branches and is open 24/7. The executive chairman of MYbank stated that their mission was to “give affordable loans for small and micro enterprises, to provide banking services, not for the rich, but for the little guys” (techcrunch.com). The firm looks to give out $800,000 worth of loans in the coming year; however, it stills waits for government permission to begin extending credit from its $640 million of registered capital.
Alibaba, which has become a champion for Chinese economic progress, will be an interesting company to keep an eye on in the coming years. As the firm is registered on the New York Stock Exchange, it must publish all of its financials to the public, so it will be a relevant method of gauging Chinese consumer sentiment through the revenue breakdowns the company will have to list in its 10-Q’s and 10-K’s.