Alibaba Seeking Partners to Boost Overseas Shoppers as IPO Looms
Alibaba Group Holding Ltd., the world’s biggest online retailer, will seek partners for payment processing and logistics as it tries to lure more overseas shoppers ahead of an expected initial public offering.
Alibaba’s two most-popular platforms, Taobao Marketplace and Tmall.com, also are expanding in Hong Kong, Taiwan, Singapore and Malaysia, Daphne Lee, director of overseas business at Taobao.com, said during a briefing in Hangzhou, China, today.
“We want to partner with local companies in payments systems and logistics to reach the overseas Chinese market,” Lee said.
Taobao Marketplace links individual buyers with sellers and has more than 500 million registered users, while Tmall.com connects retail brands like Nike Inc. and L’Oreal SA with consumers. The two platforms are fueling profit at Alibaba that doubled in the three months ended in December as analysts anticipate an IPO this year or next.
Jack Ma, Alibaba’s billionaire executive chairman, said last year the Hangzhou-based company may go public within five years. Alibaba has said it has no timetable for an IPO.
Alibaba is considering a more conservative valuation for its IPO than the social-networking company Facebook Inc. achieved last year, a person familiar with the situation said this month. Facebook has lost about 40 percent of its $104 billion price tag from its offering last year.
Alibaba’s platforms are dominant in China. On Nov. 11 alone, Taobao Marketplace and Tmall.com sold $3.1 billion of goods. Alibaba’s profit doubled in the three months ended in December to $642.2 million from $236.9 million a year earlier, according to a filing to the U.S. Securities and Exchange Commission by Yahoo! Inc., a shareholder.
Alibaba’s business-to-business platform is strong overseas, while Taobao Marketplace and Tmall.com, which focus on consumers, compete against local e-commerce sites in Taiwan and Japan, said Alex Wang, a Beijing-based analyst at Internet consulting group iResearch.
The value of goods sold on Alibaba this year may reach about $330 billion, he said.
“Southeast Asia holds some opportunities for their business-to-customer platforms,” Wang said.
The moves to boost overseas development come as anticipation grows for Alibaba’s IPO. The offer’s valuation could reach $62.5 billion, according to the median of eight estimates by investment banks and research firms since February, based on data compiled by Bloomberg.
Alibaba’s revenue rose 80 percent to $1.84 billion in the three months ended December, Sunnyvale, California-based Yahoo reported in its Securities and Exchange Commission filing. Yahoo owns a stake of about 24 percent in Alibaba.
Morgan Stanley estimates Alibaba’s revenue for the 12 months through December of this year may increase 59 percent from 2012 to $7.48 billion, and another 44 percent in the next year, analysts Jordan Monahan and Scott Devitt said in a March 6 research note.
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