Alibaba Group Holding Ltd (NYSE:BABA) was one of the hot names in the wall street towards the end of 2014, where it made a scintillating debut and soared up to $120, before started dropping towards the end of 2014. But not just Alibaba Group Holding Ltd (NYSE:BABA) is gaining momentum, a Chinese group-discount website, Meituan.com, which is backed by Alibaba Group Holding Ltd (NYSE:BABA), has raised around $700 million from investors. A Bloomberg article discusses about Meituan.com and the company’s CEO, Wang Xing’s comments about this.
Due to this $700 million by unidentified investors, the worth of Alibaba Group Holding Ltd (NYSE:BABA) backed Meituan.com has soared to around $7 billion. Xing said in a media conference at Beijing that Meituan.com has transaction volume of around 46 billion yuan by the end of 2014 and he expects that to go as high as 100 billion yuan by the end of 2015 and 1 trillion yuan by the end of 2020, which is a staggering growth even by Alibaba Group Holding Ltd (NYSE:BABA) standards.
Alibaba Group Holding Ltd (NYSE:BABA) partly-owns this group-discount website company. Will Alibaba Group Holding Ltd (NYSE:BABA) shares get a boost from this high-flying website? Xing said that the company is focusing mainly on expanding into many business areas such as hotels, movie-tickets and food-delivery. He also said that the company is interested in an IPO, but he added that there are no plans for this year though.
Meituan.com has around 20 million mobile users. They compete mainly against other websites which target middle class people looking for good restaurant and entertainment deals. The website is currently operational in around 1000 cities in China, which was just 300 by the end of 2013. Meituan.com began its operations in 2010, with just $12 million investment from Sequoia Capital following a $50 million from Alibaba Group Holding Ltd (NYSE:BABA) and Sequoia Capital.
Ecommerce is currently the booming business in China and reports suggest that money spend these online portals will go as high as 3.3 trillion yuan by the end of 2015. Alibaba Group Holding Ltd (NYSE:BABA) already has a big market share and people expect that it will take more market share in the years to come as well.
So, placing a bullish bet on Alibaba Group Holding Ltd (NYSE:BABA) will never fail considering the growth opportunities in China for ecommerce.
Disclosure: None
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