Three decades of rapid economic growth
Alibaba is one of the most successful companies to emerge from China’s three decades of rapid economic growth. It is often referred to as “the Amazon.com of China,” but that description fails to do Alibaba justice.
No, Alibaba is not another Sino knockoff of a pioneering U.S. firm. It’s different, and uniquely Chinese.
Unlike Amazon, Alibaba doesn’t stockpile the goods it sells in giant warehouses bustling with shipping clerks. Instead, it connects buyers with sellers. It’s essentially an exchange. Its Web platforms enable shoppers to buy goods directly from businesses large and small. Its technology works especially well with the smartphones that are the most common way for Chinese citizens to connect with the Internet.
Alibaba makes money by charging commissions and fees, or selling ads and search placements. Its business model is a highly profitable hybrid that incorporates features from Amazon, Google, eBay and PayPal — a secure payment system is among Alibaba’s most important innovations.
Its founder, Jack Ma, created Alibaba step by methodical step. For years, he introduced small, pragmatic upgrades until Alibaba worked well enough to take China by storm. Today, it is the hottest e-commerce site in the world’s biggest country — and therefore a desirable investment prospect. On Friday, it was expected to raise $25 billion in an initial public offering of its stock, valuing the company at nearly $200 billion.