Alibaba, now the world's biggest ecommerce company by gross merchandise volume, is one of China's most impressive business success stories. Founded in 1999 by former English teacher Jack Ma, it has grown to become the country's most valuable internet company, and one of China's few major commercial enterprises not controlled by the state. The Alibaba corporate name is used mainly for the group's international wholesale trading portal. Its biggest single business is now domestic ecommerce site Taobao.com, the Chinese equivalent to eBay and Amazon, linking individual sellers and buyers, while counterpart Tmall.com is a shopfront for more established brands and outlets, and Juhuasan.com offers time-limited flash sales. In 2009, the group launched promotional shopping festival "Singles Day" for the first time. Held on 11th November each year across all group sites, it has grown to become the world's biggest retail event. Gross sales in 2016 set a new record of around $18bn in 24 hours. A separate part-owned group subsidiary, Ant Financial Services, runs payment platform Alipay and online bank MYbank. The group also controls various local digital media and entertainment assets, and acquired famed regional newspaper the South China Morning Post at the end of 2015. A key milestone in Alibaba's development was the creation in 2005 of a strategic share-swap with Yahoo Inc, and acquisition of the US company's local operations in China. By the mid-2010s, Yahoo Inc's single most valuable asset was its minority shareholding in Alibaba. Founder Ma remains executive chairman of Alibaba with Daniel Yong Zhang as CEO. Revenues for the year to March 2016 were RMB 101bn (approx $15.7bn). Gross sales volumes through group-owned sites were almost RMB 3.1 trillion ($480bn) that year, higher than any other ecommerce company, and Alibaba had more than 423m registered active users. Japanese group Softbank controls just under a third of Alibaba's equity, while Yahoo still has 15%. Adbrands does not currently profile this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
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Capsule checked 30th December 2016
Adbrands Weekly Update 12th Jan 2017: Blurring the lines between online and physical retailing, China's Alibaba Group has offered to acquired most of the shares it doesn't already own in local department store and shopping mall operator Intime for $2.6bn. Intime operates 29 stores and 17 malls in leading cities across China. Alibaba already controls a 28% stake, acquired in 2014. It aims to increase its holding to 74%, while Intime's founder Shen Guo Jun would retain the remaining equity.
Adbrands Weekly Update 17th Nov 2016: Let the seasonal shopping frenzy begin! With Western retailers' Black Friday on the horizon next week, Chinese online giant Alibaba set the tone for what we might expect with another record-breaking "Singles Day" shopping festival last Friday. Alibaba's annual 11.11 event has wholly transcended its origins as a celebration of staying single, in which shoppers were encouraged to reward themselves with a small gift. It's now the world's biggest retail event in which Chinese shoppers funnel vast sums of cash through the company's Taobao and TDmall online sites, encouraged by a plethora of promotional events and celebrity guest appearances. Around 100,000 different merchants took part this year and last year's record sales total was trashed within just a few hours. Total merchandise volumes for the day soared by almost a third to RMB 121bn, or around $18bn at current rates. In one single day. This year more than 80% of purchases were made on mobile devices.
Adbrands Weekly Update 17th Dec 2015: It's that Citizen Kane complex: some men just aren't happy unless they own a newspaper. Jack Ma, CEO of Chinese online giant Alibaba, is to follow in the footsteps of Amazon's Jeff Bezos, with the acquisition of a famous daily paper, in this case Hong Kong's storied South China Morning Post. An English language broadsheet first published in 1903, the Post is increasingly positioning itself as the Asia Pacific equivalent to the International New York Times (the old International Herald Tribune), offering a non-partisan worldview on China's political, economic and social development. The SCMP acquisition was made through Alibaba, though the two units will remain separate. In 2013, Jeff Bezos personally acquired the famed Washington Post paper.
Adbrands Weekly Update 10th Dec 2015: A sell-off of Yahoo got another step closer with a decision by the company's board to abandon an earlier proposal to spin off its $32bn equity stake in Alibaba. That plan runs the risk of incurring a huge tax charge. Instead, the board will focus its efforts on what it called a "reverse spin-off strategy", namely the spin-off (or sale) of Yahoo's internet operations. Commentators (or in this case perhaps just wishful thinkers) are already positing an acquisition of Yahoo by Verizon. Such a deal would bring to fruition a long-predicted merger of Yahoo with its fellow dinosaur AOL, which Verizon acquired earlier this year. However CEO Marissa Mayer remains defiant over the company's continuing independence. "I'm very proud of the accomplishments we have made and there's a lot more I'd like to see done here. So I have no intention of stepping down," she told the Financial Times.
Adbrands Weekly Update 29th Jan 2015: Yahoo delivered another lacklustre set of numbers but cheered investors with a plan to spin off its remaining stake in Alibaba, worth a whopping $40bn, into a separate company. That would allow Yahoo shareholders to cash out at their own pace. Alternatively, Alibaba might choose to buy back the stock on a more favourable tax basis than if it were to reacquire direct from Yahoo. However the Alibaba assets currently make up the vast bulk of Yahoo's valuation, so it remains to be seen what happens once they're stripped out. Yahoo's display ad business continued to decline in 4Q, reversing a small increase in the previous quarter. Full year revenues slipped just over 1% to $4.62bn. Net earnings soared by over 500% to $7.5bn, because of previously reported gains from Alibaba stock sales. Adjusted earnings slipped 13% to $1.4bn.
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