I first wrote about Alibaba in September 2014 at the time of its IPO (Initial public offering) priced at 21 billion US Dollars – the largest ever! This valued the company at $160 billion. And today, just 3 years later, the company is now worth $447 billion. Alibaba’s interests include business to business online web portals, payment services, search engines and cloud computing services.
The size and reach of Alibaba today is almost beyond comprehension. According to Bloomberg News Alibaba’s Singles Day (the Chinese equivalent of the U.S.’s Black Friday) generated a record 168.2 billion Yuan ($25.3 billion) in sales, (just to be crystal clear – this is in one day) as the e-commerce giant worked with traditional retailers to market discounted lobster, iPhones and refrigerators shoppers from at least 225 countries and regions.This event dwarfs Black Friday and Cyber Monday.And about 90% of transactions were done via mobile. At its peak, the company processors handled 256 000 transactions per second. Citigroup predicts transactions will rise by more than 30% to a 158 billion Yuanthis year. Billionaire found Jack Ma is using it as a testing ground for his plans to revamp China’s $4 trillion traditional retail sectors with technology, an experiment that could help the behemoth gain an edge in China’s saturated market. Alibaba’s shares have been a fantastic investment. The shares have doubled in value over the last 12 months and that equates to a value-add of $260 billion. Only Apple has added more value to shareholders this year. Apple shares have increased in value by 58% thereby increasing the net worth of its shareholders by $324 billion.
That is the equivalent of R80 000 for every single South African – all 60 million of us! In summary, according to Wikipedia, Alibaba is the world’s largest and most valuable retailer since April 2016, after it surpassed Wal-Mart, with operations in over 200 countries, as well as one of the largest internet companies. As of November 2017, Alibaba has over 550 million active users across its platforms. Recently, Alibaba has outperformed major cloud players including Amazon, Microsoft and Google in public cloud revenue growth, achieving triple-digit percentage revenue growth year-on-year. America always had the “biggest” everything, now it’s China’s turn. For the best returns, investors may very well have to look towards the East in 2018! HappyHunting! If you are not happy with your portfolio performance or would like a second opinion, please do not hesitate to contact Fenestra for a confidential consultation.