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Alibaba kicks off global roadshow for IPO

2014-09-22 09:29:18 China China.com Click:

China's e-commerce giant Alibaba Group on Monday kicked off its 10-day international roadshow to pitch investors prior to its expected record-breaking initial public offering (IPO) on the New York Stock Exchange.

Alibaba's founder and executive chairman Jack Ma reportedly met with several hundred investors at the Waldorf Astoria Hotel in New York, the roadshow's first stop before the company continues the tour in the US, Europe and Asia, including cities like Boston, Los Angeles, Singapore and London. The company is reported to debut its IPO on Sept 18.

"There is no doubt that Alibaba's IPO on the New York Stock Exchange will help to amplify its brand recognition on a global scale," said Mark Otto, a partner atJ Streicherand Coand a trader on the NYSE.

Alibaba kicks off global roadshow for IPO

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E-commerce giant Alibaba - whose IPO experts say could raise up to $21.1 billion - is the world's largest online and mobile commerce company with 279 million active shoppers. The value of goods and services generated $296 billion in the 12 months leading up to June this year.

"This is a major step for Alibaba because it forces the world financial community to evaluate the company and its business model," said Frank Lavin, a former US undersecretary of commerce for international trade and founder of Export Now, which helps companies sell online in China.

The company updated its SEC filing on Sept 5, with shares expected to be priced at between $60 and $66 - higher than Yahoo Inc, which owns some 22 percent of Alibaba. At this range, Alibaba is valued at $160 billion, making it the largest IPO ever in the US.

In the updated SEC filing, 49-year-old Ma said the company aims to build the infrastructure for the future of e-commerce.

"Alibaba's mission makes it impossible for us to become an empire-like business," Ma wrote in the letter. "We believe that only by creating an open, collaborative and prosperous ecosystem that enables its constituents to fully participate can we truly help our small business and consumer customers."

Hangzhou-based Alibaba connects buyers and sellers through its six marketplaces including Taobao.com and Tmall.com. The e-commerce giant, with its main focus on the 1.3-billion-customer-based Chinese market, including more than 620 million internet users, has spent $4.6 billion on acquisition deals this year.

Alibaba formed a Silicon Valley-based team last year focusing on investment that strengthens its current e-commerce and digital businesses. The company has acquired stakes in US online retailers Fanatics Inc, ShopRunnerInc and Quixey Inc, a search engine for mobile apps to attract more mobile-based users.

Avery Booker, a partner with China Luxury Advisors, a global boutique consulting firm that helps brands attract Chinese shoppers, said the IPO will make Alibaba go beyond a "regional" power to become more globally recognized, and that more acquisitions will be underway.

"The company will likely move forward with even more acquisitions of Western tech companies and develop an even bigger footprint in new markets like the US, where it has spent significant time in recent years laying the groundwork for consumer-facing products and new e-commerce sites like 11 Main," said Booker.

While many expect the company's IPO in the US will likely create competition between e-commerce firms like Amazon.com and eBay.com, it also could provide opportunities for partnerships, said Booker.

"With e-commerce growing in popularity and importance at the higher end of the market in China, this opportunity could be particularly ripe for Western fashion, lifestyle and health e-tailers aiming at China's middle and upper-middle class consumers," Booker said.

Lavin, of Export Now which works with Alibaba's Tmall, said while the company is smart to look at overseas markets, it still faces two possible challenges following the historic IPO.

"Alibaba needs to work to keep e-commerce growth in China on track. This remains the core driver of Alibaba's revenue," said Lavin. "And Alibaba needs to be able to demonstrate that its recent overseas acquisitions, 11 Main for example, are performing as planned."

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