Media have been opining and hyping Alibaba's USD21.8 billion IPO impact
on the global Internet ecosystem and how the company plans to invest its
new wealth.
Unlike most IPOs, many early investors in Alibaba will have no lock-up
period and they can sell their shares today. Though CEO Jack Ma pledged
that customers are more important than investors to Alibaba's growth,
this uncommon nod towards investors may instead be a bellwether to how
insiders view Alibaba's future. If those investors sell on the first
day, it may solidify the Chinese technology insider rumors over recent
years that Alibaba fears a slowdown of its growth in China. This IPO may
then just be an exit for those investors who feared future losses if
the company remained private.
So with a China slowdown, the company is expected to seek growth
overseas in places like Brazil, Southeast Asia, and Eastern Europe.
Startups and mature companies are said to be eager to grab some of
Alibaba's new wealth. But how does the hype translate into profit for
Alibaba?
A few weeks ago, Amazon.com announced plans to begin operations in
Shanghai's new free trade zone to allow Chinese exporters easier access
to global customers. Alibaba can do the same thing, but if it expects to
truly dominate the entire supply chain, it could purchase a global
logistics and courier company like DHL, Fedex, or UPS.
Or maybe Alibaba takes a different route, and instead focuses on global
retailing strength. Could it purchase a chain of convenience stores?
Alibaba already partners with many Greater Chinese retail operators to
use the outlets as drop-off points for delivery of goods to customers.
But what if it changes strategy altogether? Instead of focusing on trade
of physical goods, what if Alibaba focuses on digital consumption?
Alibaba could ramp-up its focus on online entertainment investments, and
maybe even focus more on business media assets. Maybe Alibaba even gets
involved in cryptocurrency like Bitcoin, or invents its own Alicoin
competitor.
Ultimately, Alibaba now has enough cash to pursue many of these ideas in
tandem, but it must juggle those plans with the corporate governance
headaches of being a Chinese publicly-listed overseas firm. Today's big
payday comes with lots of hope and many more opportunities.
