Chinese eCommerce behemoth Alibaba’s IPO in coming weeks is expected to be among the largest in world history when the stock goes live in New York.
Forbes reported that the Alibaba IPO is expected to be as high as $20 billion, according to reports.
Already investors are wondering where the ceiling is for Alibaba’s IPO, as The Inquisitr has previously reported.
But there, too, is the question of where does the company go for future growth.
Already, Alibaba dominates the Chinese eCommerce market. Of that, there is almost no dispute from anyone who watches Wall Street. And while the company can continue to perform well in China and make investors happy in the short term, at some point large institutional investors are going to get antsy for advancement beyond the Chinese market.
According to Forbes contributor Joel Backaler, the company will not be likely to risk losing domestic marketshare in the world’s largest economy simply to expand beyond China’s borders.
That said, Backaler believes the company should not give up on international markets entirely.
“Across industries, businesses that once thrived are now under extreme pressure due to intense competition, increased labor costs, and heightened regulatory scrutiny. In the future, Alibaba will need to increasingly focus on international markets for two reasons: 1) to diversify its operations and become less dependent on the Chinese market 2) to acquire new capabilities such as advanced technology, managerial expertise and brands, to increase its competitiveness in the Chinese market and in markets worldwide. A combination of commercial motivations and government policy have already lead Chinese firms including Lenovo, Huawei, and Haier to expand around the globe.”
He said the key to any international growth is going to come from the company hiring executives that have not only a firm understanding of the eCommerce and technology markets, but also have international experience. The reason why, Backaler said, is due to the issue of when Alibaba spreads its wings and becomes not only the Chinese eCommerce powerhouse, but attempts to make inroads in the international market due to domestic issues.
“In the short-term, Alibaba is likely to continue focusing its efforts within China, where it is already a market leader and the growth potential is enormous. But as the domestic business environment grows increasingly competitive, Alibaba’s globalization strategy is not a question of ‘if’, but ‘when’. When Alibaba does ultimately expand aggressively into overseas markets, it will be ready. Alibaba has as much experience as its global competitors and it is run by internationally exposed leadership. Although Alibaba currently lacks significant international offices and dedicated platforms for markets outside of China, its founding model – connecting buyers and sellers around the world – makes the nature of its business inherently global.”
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