Alibaba Group Holding Ltd (NYSE:BABA) is easy to compare to U.S tech giants like Google Inc (NASDAQ:GOOGL), and especially Amazon.com, Inc. (NASDAQ:AMZN), however it’s an unrealistic comparison according to Ping Wong, the secretary-general of Internet Society of Hong Kong. She spoke with Bloomberg today about Alibaba Group Holding Ltd (NYSE:BABA), and what separates them from U.S tech giants.
“First of all, we have to know about the difference between Silicon Valley and China. Silicon Valley is leading the world as a mature and complete stock ecosystem, and it is an open and free market and encourages creativity and innovation. And in China, everyone knows it is a closed market,” Wong said.
As she explained, Alibaba Group Holding Ltd (NYSE:BABA) was fostered in this closed environment, which included working closely with the Chinese government, and are adept at managing themselves through it and the regulations that come along with that. It is therefore quite a feat for them to rise to the position they have, with a dominant hold over the Chinese e-commerce market of more than 80%.
She also mentioned some of the unique aspects of the Chinese consumer market, which includes their penchant to shop more often each month (eight times) than Americans do (five times), and how even small differences such as that can have an impact on how products and services need to be tailored to the consumer.
Also unlike U.S e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN), which has long struggled to make a profit even as revenues have soared, Alibaba Group Holding Ltd (NYSE:BABA) is already generating strong profits alongside its skyrocketing revenue. For his part, Alibaba Group Holding Ltd (NYSE:BABA) executive chairman Jack Ma has a dream of the company becoming a global force in commerce like Wal-Mart Stores, Inc. (NYSE:WMT).
Alibaba Group Holding Ltd (NYSE:BABA) is currently trading at $90.40 in early afternoon trading, up $22.40 from it’s IPO price.
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