The History of Alibaba

This article was written by Phineas Upham

Jack Ma founded the Alibaba Group, a Chinese eCommerce retailer unlike anything we have in the West. He began his career building websites for businesses around the globe, with the help of American friends who recruited business for him. He is credited with founding China Yellowpages, which is widely believed to be China’s first online company.

Alibaba is slightly harder to quantify. It is simultaneously an eCommerce engine and a payment platform, but it dabbles in cloud computing as well. It is said to be the Chinese version of Amazon, but in practice the company is quite different. Though, it has shattered any profit margins from these American companies, earning over $170 billion in sales.

Ma founded the company in his apartment. He is said to have come up with the name before the concept. He used the allegory of Alibaba to describe his goals: “Alibaba is a kind, smart business person, and he helped the village. So… easy to spell, and globally known.”

Though the company is primarily considered an online venture, though there are talks of retail locations in China. The company worked with a Chinese real estate firm to open these locations, but this phase is thus far still in planning limbo.

Ma also made waves when his company announced that they would no longer sell shark fins, which are exceedingly popular in China but illegal elsewhere.

Alibaba is set to make an IPO in the United States, where analysts say the company stock would be worth somewhere around $25 million. There are still some bumps in the road ahead, but Alibaba seems primed for expansion into International markets.

About the Author: Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Phineas on his Twitter page.

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