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Alibaba

Alibaba Seeks to Split Shares to Eight Ahead of a Reported $20B HK Listing

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Alibaba, the biggest eCommerce giant from China, is all set for its IPO listing, which the company has filed in Hong Kong. The IPO may take place in Q3 this year, and it is expected that it may raise up to $20 billion, biggest in Hong Kong after 2010.

Alibaba
Image Source: yahoo.com

Reportedly, Alibaba has proposed to split its one ordinary share into eightfold, in order to raise more funds. The company’s single ordinary share stands at 4 billion, and dividing one to eight will make it $32 billion.

Alibaba will be proposing the idea at its annual general meeting to be held on July 15, in Hong Kong. Here, the investors will be asked to vote for in favour or against the proposal, as they would want to. And, if the proposal gets the winning votes, the company will carry out the spilt by July 2020.

“The Board of Directors is proposing the Share Subdivision to increase the flexibility for the Company in future capital market activities. Among other reasons, the one-to-eight share subdivision will increase the number of shares available for issuance at a lower per share price, and the Board of Directors believes that this will increase flexibility in the Company’s capital raising activities, including the issuance of new shares,” stated Alibaba in the filing,explaining the reason behind the splitting up of share.

According to the reports, the company’s board is already in favour of the proposal and just waiting for the investors to poll. The reports also suggest that Alibaba has already submitted its papers for IPO.

The company went for an IPO in 2014 in the U.S. citing the lack of flexibility, as one of the reasons to not to go for Hong Kong for the listing. It was one of the biggest IPOs and had raised $20 billion at that time. But almost two years ago Hong Kong made some relaxation in its listing rules, such that most of the Chinese companies, now, are seeking for filing IPOs in Hong Kong.

Alibaba Smashes its own Last Year’s Single’s Day Sales Record

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Amazon and Flipkart broke their own previous records of sales in the past festive season sales held before Diwali. But, with the 10th annual Chinese shopping bonanza Singles’ Day, the Chinese internet business giant Alibaba group has made e-commerce history, after it generated a record $30.7 billion in only 24 hours.

Alibaba
Image Source: foshansourcing.com

The biggest sales day of China celebrated on 11/11, recorded a 1 billion sale in the first 1 minute and 25 seconds. Alibaba’s Single’s day sale aka the double 11, is the biggest e-commerce sale in the world. On the 11th of November, as soon as the sale started, at midnight, people were buying things from milk powder to iPhones on the website.

Alibaba.com is the biggest dominating e-commerce marketplace, in China, and it is also planning to expand to other countries as well. The Single’s sale is a month-long event that peaks on November 11, and this year it has surpassed its own record of last year’s sale. Last year, it had earned $24 billion in just short of 16 hours. Despite the highest sale this year, the growth rate fell from 39 per cent to 27 per cent, by the end of the day.

Almost ten years ago, the Alibaba group started the Single’s Day sale as a novelty student holiday to celebrate being single and treat themselves through retail therapy. But, in the past ten years, it has become China’s biggest shopping festive season sale. Although most of the Chinese public did not show much interest in the 2018’s Single’s Day sale, Alibaba was still able to surpass the total earnings of Black Friday and Cyber Monday sales (2017) combined.

In 2015, Jack Ma the founder of Alibaba Group had shown an interest in making the Single’s Day sale open at a global level, and also, organised the first non-Chinese Single’s Day in Russia, tiny Hong Kong and the US, last year. The sale mostly included the purchase of mobile phones, wool coats and knitted sweaters. This year, the sale was also organised in South Korea, U.S. and Japan, where the purchase of the same items has been recorded.

Daniel Zhang to Replace Jack Ma as the Chairman of Alibaba Next Year

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Alibaba
Image Source: nan.ng

On last Friday, the Chinese billionaire Jack Ma announced his retirement from the position of the chairman of Alibaba. He is going to serve as the chairman of the company till 10 September 2019 and will stay a member of the board until 2020. Jack Ma is only 53 and wants to devote his time to Philanthropy. At the age of 53, he is the only Chinese billionaire who has taken such a decision.

Jack Ma founded Alibaba in 1999, as a business-to-business marketplace. Soon, he expanded the business, to obtain a $420 billion profit, within a few years, making Alibaba as a consumer based platform. He also tried his hands in cloud computing, digital media, and other industries, including the payment gateway AliPay. His success story inspires everyone and he is referred to as ‘Teacher Ma’, in China. His decision has shaken the whole world, but he has got a plan for himself. Jack Ma is going to stay as a lifetime partner of the Alibaba Partnership and will continue working with his philanthropic organisation, the Jack Ma Foundation.

Jack Ma had already decided to retire from his post, a long time ago. Almost a decade ago, he had asked his team about what they will do without him. Now when he is stepping down from his position, the current CEO of the company Daniel Zhang is going to replace Jack Ma, to hold the position of the chairman of the company.

Daniel Zhang joined as the CEO of Alibaba, in 2015, and since then, Alibaba has seen consistent and sustainable growth, for 13 consecutive quarters. On this Jack Ma said, “This transition demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organizational excellence and a culture of talent development”.

Snapdeal Story: How a deals website became top eCommerce platform of India

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Two best friends having common interest in food and maths from Delhi Public School started an offline coupons business which later turned into one of the biggest eCommerce companies of India. The CEO Kunal Bahl (alumni Wharton School, US) and COO Rohit Bansal (IIT Delhi alumni) joined hands to create Snapdeal.

Kunal Bahl, Snapdeal
Kunal Bahl, Snapdeal, Image Credit: Wikimedia.

Back in 2007 when Kunak Bahl’s US visa got rejected and was asked to return to India, he along with Rohit Bansal who was working for CapitalOne in India, decided to work together and do something different.  Kunal while studying in US did 3 different jobs to make up for his monthly expenditures. It is there where he started using food coupons so that he could get a discount and mitigate his expenses with only two jobs. This is what he along with Rohit planned to start in India.

Moneysaver to Snapdeal
They started their entrepreneurial journey in December 2006 from MoneySaver. The business model had no technology involved and was pretty simple. Snapdeal (then MoneySaver) would  get attractive deals from the restaurants, hotels, saloons etc. on the promise of getting them more customers. These coupons were printed in a discount book which they would sell to  customers.

It was a simple business model but they had a hard time getting those deals and coupons. It wasn’t easy to convince businesses to offer coupons as well as customers to buy those booklets. Not many people were aware of this coupon model in India.

As soon as a they started this business they were at a stage where they had only 20,000 Indian Rupees ($300) in their company bank account with current liabilities to the tune of 500,000 Rupees ($7000). They had to pay salaries and other dues from their personal savings and ended up only in Rs. 50,000 ($700) in their personal bank accounts in total.

They did many experiments including community coupon mailing where they would get attractive deals from the hotels, restaurants, spas, saloons etc and mail those to the community around. “It was a total waste”, says Kunal Bahl as the mailing infrastructure in India was very bad. Slowly things picked up and Snapdeal went online in 2010 with initial investment from Vani Kola’s venture capital firm.

Pivoting from deals to eCommerce 
The company was generating  good revenues and was on right track. They acquired Grabbon in 2011. On suggestion of some of the merchants involved in deal business with Snapdeal, Kunal and Rohit checked out Alibaba.com. Inspired by the success of Alibaba, Kunal Bahl took a firm decision to pivot from deals business to eCommerce. This was a tough and risky decision. However, this decision turned out to be so good that today Snapdeal is among top 3 eCommerce websites in India.

They created a marketplace for small merchants and industries so that they could directly connect with the millions of customers online. This eCommerce model was not applied by Flipkart (at that time) as it used its own huge inventory to sell and deliver products. However, later Flipkart too joined the marketplace bandwagon.

snapdeal-2011
Snapdeal in 2011

To sustain growth and compete with companies like Flipkart they raised further investments of $45 million from Nexus ventures and Bessemer venture partners. They also received a $50 million investment from from E-bay and other existing partners.

E-commerce to M-commerce
Kunal Bahl believes in constant innovation and growth. Looking at the changing user behavior and rapidly increasing mobile and internet penetration, Snapdeal created a mobile application that could work smoothly even on 2g connection. Idea was to get 50% of their orders from the mobile application.  Mobile application gave much needed push by increasing the orders, 80% of which coming only from mobile app.

With 30 million products from around 300K sellers with a reach of 6,000 towns and cities across the country, Snapdeal’s YOY growth today stands at 600%. Snapdeal counts Ratan Tata, Alibaba, SoftBank Corp, IndoUS Ventures, Intel Capital, Nexus Ventures, eBay, Kalaari Capital, Temasek Holdings etc. as their investors. Snapdeal also acquired FreeCharge, the online recharge and payment wallet in an equity deal in 2015.

Online movie ticket company Alibaba Pictures secures $260M funding

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Alibaba pictures a subsidiary of Jack Ma’s Alibaba group has secured series A funding to the tune of $260M. Alibaba pictures run an online movie ticket platform Taobao Movie. After this funding Taobao Movie’s valuation stands at $2.1 billion. Taobao Movie was brought by Alibaba pictures from its parent company in November 2015.

taobao

Taobao Movie lets Chinese movie lovers book movie tickets for around 5,000 movie theaters in China. Alibaba Pictures Group last year also bought Yueke Software engineering, a movie ticketing software company for $134M. Online movie ticketing is a crowded space all over the world. There are already a number of players in online movie ticketing business in China.

Zhang Qiang, CEO of Alibaba Pictures, said:

“The completion of this Series A Financing demonstrates that the business strategy, market prospects and operational capability of Taobao Movie has been well recognised by the industry. With the support of more abundant resources and capital, we will continue to create greater value for our partners, investors and the market.”

This round of funding was led by CDH Investments, Ant Financial Services Group, and Sina.com.

Jack Ma: A self made billionaire

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E-commerce is one of the fastest growing segments in the industry. Many young entrepreneurs have tried their hands in this field but very few were able to taste success. One such hugely successful eCommerce business is Alibaba.

The man behind this extremely successful ecommerce business is Jack Ma. Today Ma the founder and executive chairman of Alibaba Group has an estimated net worth of $25 billion. Who would have imagined that a 5 feet tall Chinese man will lead Alibaba to a record breaking $25 billion IPO and become 18th richest person in the world? Alibaba’s IPO was bigger than Google, Facebook and Twitter combined.

Determination & persistence paves the way
Ma was born in Hangzhou, China. Lack of resources was never a excuse for him to learn or do something. In Childhood Ma developed a desire to learn English, so he started to converse with foreigners. For nine years he used to guide foreigners around the city for free to learn English. This opened the door to many entrepreneurial skills; from interacting with people to knowing their thought process; this somewhere pushed him to develop his own views on capitalism and entrepreneurship. During this course he became pen pals with one of these foreigners, and she nicknamed him “Jack”, because his real Chinese name Ma Yun was too difficult to pronounce.

But before he became the richest person in China, Ma went through a lot of rejections. Can you imagine the man behind Alibaba’s success was rejected by three universities?Quote JackMa2

Today world’s top universities and business schools like Harvard take pride in inviting Jack Ma for guest lectures whom once they were not ready to give admission. He was rejected by Harvard 10 times as a student. Jack Ma learnt from failures than through the formal channels of education.

He applied for 30 jobs and got rejected. Jack Ma once said, “When KFC came to China, 24 people went for the job…23 people were accepted. I was the only guy who wasn’t.” His journey from a failed man to a successful tech leader & entrepreneur is exemplary .

Ma’s first date with internet and rise of Alibaba
“Beer” was the first word that Jack Ma searched for on the internet- Really? Beer? Well, during his trip to US, he searched for “Beer” and then “China”, when no results came up, he decided to set up a Chinese website. He saw the web as the future of business and even tried to register the name Internet!
In 1995 he along with his wife and a friend founded an internet company called China Yellow Pages. This company made 5,000K Chinese Yuan (US$800K).

In 1999 he started Alibaba, a B2B marketplace along with his 17 friends. He chose the name Alibaba since it was unique and easy to spell and people were able connect with this name very easily. Alibaba.com allows merchants and companies to trade products online. Within a short period of time Alibaba became one of the largest websites online.

Ma is a larger-than-life figure. Even after reaching the great heights, Jack Ma is the exceptionally optimistic and determined. His journey to success is definitely one which will inspire you even in your darkest days. Jack Ma believes that “If you are still poor at 35, you deserve it!” His journey is a perfect example of a rag-to-riches story. The most important lesson is- when the dream is big enough, the facts don’t count.

Most of us indulge so much in making excuses about things that we even forget to make the best of every situation. We all give countless excuses everyday like lack of money, lack of good education and people around us always discourage us. The same was the case with Jack Ma, he had nothing to push him forward but his strong desire to excel made him the man he is today.

“We are never in lack of money. We lack people with dreams, who can die for those dreams” – Jack Ma