Alibaba’s IPO: From bazaar to bonanza

“TEN to 15 years from now, I think China can be eBay’s largest market on a global basis.” So declared Meg Whitman grandly back in 2004. At the time, she was the chief executive of eBay, an American e-commerce pioneer. Things did not work out as planned. Local competition proved so fierce and nimble, in contrast to eBay’s managers, that the company was forced to beat a humiliating retreat.The local leading the charge was Jack Ma, a school teacher who founded Alibaba at his apartment in Hangzhou, a city near Shanghai, in 1999. The original Alibaba website connected small manufacturers at home with commercial buyers overseas. But Mr Ma sensed early on that the real prize would be serving China’s rising middle classes. So he formed Taobao, a portal that consumers use to sell to each other, and added Tmall, a business-to-consumer (B2C) site.Alibaba’s triumph has been breathtaking. The firm’s portals control four-fifths of all e-commerce in China. Taobao is the country’s leading e-commerce website, and Tmall leads the B2C market. The firm’s sales exceeded $5.7 billion last year on Singles’ Day, a marketing event held annually on November 11th. Measured by the value of…

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