Alibaba, a trailblazing Chinese internet giant, will soon go public
IN 1999 Trudy Dai used to spend all night sending e-mails from her friend Jack Ma’s apartment, trying to answer queries from American customers without letting on that she was Chinese. Ms Dai was one of the first dozen employees of Alibaba, an online listings service Mr Ma, a teacher, had just started. It was already having some success connecting small Chinese manufacturers to potential customers, including the overseas ones Ms Dai was reassuring over e-mail. But the friends and students who made up the workforce were earning just 550 yuan (then $66) a month.
Mr Ma, though, already had big dreams. That year he said: “Americans are strong at hardware and systems, but on information and software, all of our brains are just as good…Yahoo’s stock will fall and eBay’s stock will rise. And maybe after eBay’s stock rises, Alibaba’s stock will rise.”
Since then, Alibaba has come to dominate internet retailing in China, which will soon be the biggest e-commerce market in the world. It has moved beyond its original remit of connecting businesses to each other to ventures that let companies sell directly to the public (Tmall) and enable members of the public to sell to each other (Taobao). Between them, Taobao and Tmall processed 1.1 trillion yuan ($170 billion) in transactions last year, more goods than passed through Amazon and eBay combined (see table 1).
The company that started in Mr Ma’s apartment now employs 24,000 workers at its headquarters in Hangzhou and elsewhere; Ms Dai is president of human resources. A few years ago Alibaba began to turn a profit; in the year to September 2012 it made $485m on revenues of $4.1 billion (see chart 2). Following a recent reorganisation it has 25 separate business units, and on May 10th it will have a new chief executive, Jonathan Lu; Mr Ma will stay on as executive chairman.