To many, the question is not that ‘if’ Alibaba Group Holding Ltd (NYSE:BABA) is going to broaden its scope into international territory, but rather ‘when’ is Alibaba going to thump eBay Inc (NASDAQ:EBAY) and Amazon.com, Inc. (NASDAQ:AMZN) under the weight of its Taobao and Tmall platforms? In an interview on CNBC, Mike Butcher, editor at large with TechCrunch, voiced an opinion similar to that of the herd.
“[…] I think a lot of people are particularly tired of eBay, for instance. They are very familiar with how eBay Inc (NASDAQ:EBAY) and Amazon.com, Inc. (NASDAQ:AMZN) operates. So, in a sense those companies have already done the education piece. Alibaba Group Holding Ltd (NYSE:BABA) has also this, I always get this this wrong, Taobao marketplace, which it plans to launch in international market, and in the English language […],” said Butcher.
If by getting tired, Butcher meant the interface of eBay and Amazon, I do not agree with him, and if he meant that the price that these retail platforms offered was too high, I am not sure if he knows how Amazon.com, Inc. (NASDAQ:AMZN) operates. Razor thin margins is the name of the game for this particular e-commerce giant, which aims to thrive on humongous volumes and in that regard has spread its tentacles throughout the world.
While Alibaba Group Holding Ltd (NYSE:BABA) is also popular for its bad reputation with the merchants who it forces to lower their prices every now and then, going international is going to be fabout much more than just that.
It would mean foregoing further expansion in the Chinese market in favour of the international space, which as I mentioned earlier is thriving on already small margins offered by the likes of eBay Inc (NASDAQ:EBAY) and Amazon.com, Inc. (NASDAQ:AMZN). Alibaba Group Holding Ltd (NYSE:BABA) knows the Chinese market place much better, has good relations with the state apparatus, something which is essential to do business in the country, and above all, there is still ample room to expand the e-commerce business there.
Alibaba’s CEO, Jack Ma, would do good if he didn’t get ahead of himself and continued doing what he is best at. Monopolise the Chinese market.
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