Chinese E-Commerce Giant To Enter US Market

An anonymous reader writes "Alibaba Group Holding, a Chinese company, filed for an initial public offering (IPO) on Tuesday to the tune of $1 billion dollars. Alibaba is an e-commerce company whose success has ensured that more than half of all parcel deliveries in China, the world's largest internet market, are directly attributed to Alibaba customers. Critics, citing cultural differences (i.e., consumer branding and shopping preferences) as well as entrenched U.S. competition, say that the company may not be as successful in the U.S. Businesses such as Amazon, eBay, and PayPal already provide the type of services that the Alibaba Group offers. On the other hand, U.S. consumers and business owners may welcome the prospect of having one more company vying for their patronage. More competition, after all, means more incentive to keep prices low enough to attract and retain more end-users."

Comments

Wha?

[kamapuaa]

The summary seems to think that Alibaba filing for an IPO in the US means that it must be opening operations in the US...actually it just filed in IPO in the US because it's a very large company and China's stock markets are sort of a joke, not really set up for a company of Alibaba's size...

You're already easily able to use alibaba.com in the US. It's kind of cool especially if you want to open your own stall at a flea market. I used taobao.com in China, it's like eBay with better consumer protection. Competing with eBay would take a massive marketing push to build up an entirely new business, basically. What makes taobao.com interesting is all the smaller specialty shops, there's a million logistical reasons why them selling directly from these Chinese shops to US customers would be a total nightmare, the language barrier being the most obvious.

Re:Wha?

[Savage-Rabbit]

The summary seems to think that Alibaba filing for an IPO in the US means that it must be opening operations in the US...actually it just filed in IPO in the US because it's a very large company and China's stock markets are sort of a joke, not really set up for a company of Alibaba's size...

You're already easily able to use alibaba.com in the US. It's kind of cool especially if you want to open your own stall at a flea market. I used taobao.com in China, it's like eBay with better consumer protection. Competing with eBay would take a massive marketing push to build up an entirely new business, basically. What makes taobao.com interesting is all the smaller specialty shops, there's a million logistical reasons why them selling directly from these Chinese shops to US customers would be a total nightmare, the language barrier being the most obvious.

A Joke? Hong Kong is the second largest stock exchange in Asia in terms of market capitalization. It is outdone only by the Tokyo Stock Exchange. It is the sixth largest in the world behind Euronext. And, yes, Hong Kong is also part of the PRC. According to the WSJ the reason Alibaba went to the US is that Hong Kong has a strict one man one vote system whereas in the US: "one set of shareholders—usually including the company's founder—has more rights than another" which would allow the founder to nominate to nominate the majority of the board. Apparently he would not be able to do that in a "one man, one vote" environment.

Re:Wha?

[Anonymous Coward]

Size has no relevance to the reliability and transparency of a market. Chinese markets excluding Hong Kong are 1) nigh inaccessible to the west and 2) crap shoots due to lack of transparency. From what I've actually seen with my own eyes, a very large percentage of Chinese companies keep two books. One for the regulators and one for themselves.

Hong Kong is definitely better in that sense.

However... Chinese (mainland) markets, yes, are a joke.

Re:Wha?

[bruce_the_loon]

More likely PRC will be Hong Kong in 30 years.

Re:Wha?

[Anonymous Coward]

I was referring to PRC stock markets. Of course you know Hong Kong isn't PRC proper, so why make a long post about it? It will possibly be PRC in 30 years.

Hong Kong is a special administrative region within the PRC. I mentioned Hong Kong because that's where Alibaba was going to have it's IPO before they went off to the US because of the "one man, one vote" rule in Hong Kong and which the HK stock exchange was not prepared to make exceptions to (according to the financial press).

Read the filing?

[Anonymous Coward]

$1bn is a placeholder sum in order to calculate values and fees. No actual target fundraising sum has been announced yet. The only things we really know right now are the amount of the placeholder, the names of the banks involved, and the structure by which the board will be determined.

The venue hasn't even been announced yet.

Yes!

[Anonymous Coward]

I love taobao, I buy stuff all the time, because I live in China. Ebay, amazon, etc will have a run for their money....

Re:Lol China

[K. S. Kyosuke]

You order a US flag and the collected writings of Ben Franklin, and a Chinese flag and a Little Red Book gets delivered by mistake? ;-)

You can already buy from alibaba and aliexpress

[drinkypoo]

But you often don't want to, because you have to wade through so much shit. And then when my aliexpress order finally showed up, it was not as described. The item literally had the opposite curvature that it was supposed to (just some automotive lighting crap) and I learned my lesson cheaply. The advantage of going to someplace like eBay is that more of the crap has been filtered out by people who received it and said "Fuck, I can't even sell this."

Re:You can already buy from alibaba and aliexpress

[frovingslosh]

NO! You can order items through Alibaba (not from) and pay through Alibaba. But you can't get what you ordered, something broken or of lower spec will usually be sent. Alibaba, who represents themselves as holding payment in escrow and settling disputes with the sellers because without that the sellers are too dishonest, will always side in any dispute with the seller, even if (as happened to me) the sellers make no counterargument against your dispute. You can't actually expect to buy what is advertised from or through Alibaba and get it. They also will delete bad feedback or even change it to positive feedback. See what people have to say about Alibaba on ResellerRatings.

Sellers on Alibaba know that they can ship just about anything and when you receive it and complain just say If you didn't like my merchandise, send it back" There is an amazing imbalance in the cost of shipping an item from China and in the cost of sending it back to China and the sellers know and exploit this. They know that if the send you a cheaper item than what is specified they will make more money and that at U.S. shipping rates it would usually cost you mote to return it than you paid for the item. Don't deal with Alibaba and the thieves, the name is one of pure irony.

Re:You can already buy from alibaba and aliexpress

[TheGratefulNet]

I've had enough bad luck with so-called 'valid' chinese ebay sellers. 98% of bottom feeders who buy from taobao and just resell. they know nothing (or care nothing) about what they sell. in the US, we call those folks 'flippers' and they are pond scum of the lowest kind. they add no value and in fact, take value away by inflating prices and gobbling up special deals just to resell later on.

recently I bought a circuit board from china and asked the seller for the schematic (it was diy oriented) and while I did get A schematic, it was for another product. I pointed this out and his reply was 'sorry, its all I have'.

this is so typical of ebay china sellers. once they have your money, they could really care less, OTHER than the fear they have of you giving them less than '5 stars'. that's all they care about. once they get their rating, you could cease to exist in their eyes.

now, this is the GOOD side of china buying. it only goes downhill from this.

and so, once enough americans experience 'china customer service' this will fail so fast, it will either turn itself around or become the new bottom feeder that everyone in-the-know avoids.

Re:You can already buy from alibaba and aliexpress

[hondo77]

I've ordered several items from aliexpress and haven't had a problem. If I did have a problem, I would have withheld payment, since payment doesn't actually get done until the buyer receives and is satisfied with the product (though you provide your CC# when you order). I'm sure they know the bad reputation buying from China has so they're doing this to overcome that. I made a small purchase first, then bought several more of the same type of items (cycling kit) from the same seller after that purchase went well. You do have to take a "buyer beware" attitude but my experience has been good.

I would also like to point out that not all of my eBay experiences, especially in the early days and certainly not from Eastern European countries, were wonderful. Ah, the adventure of globalization at the personal level!

Re:You can already buy from alibaba and aliexpress

[Jane Q. Public]

Well, this is great. It's good to hear that you ordered ONE kind of product from ONE reseller and had a good experience.

That doesn't invalidate what the many other people have had to say here.

Why I prefer to buy via Ebay or Amazon -- even from "flippers" -- is because they speak ENGLISH and you can get your item in less than 2 weeks.

Don't misunderstand me: I'm not trying to be a language bigot, but half the time when I'm reading an ad from a Chinese supplier I can't even tell what half the specs are. They're mis-stated or missing.

Re:You can already buy from alibaba and aliexpress

[Rich0]

There is an amazing imbalance in the cost of shipping an item from China and in the cost of sending it back to China and the sellers know and exploit this.

Hmm, wonder if Chinese customs actually express skepticism at all those envelopes stamped with "gift?" Anytime I order something on Amazon that takes weeks to arrive for two cents plus $4 shipping it almost always includes a false customs declaration as an added bonus.

Granted, when I get them on Amazon I tend to get what was promised, so the only people getting ripped off are the taxpayers, and those who work in US manufacturing who the tariffs are supposed to help.

Re:You can already buy from alibaba and aliexpress

[Anonymous Coward]

It probably is a mistake to generalize "Alibaba/Aliexpress is usually bad". The bad experiences are as isolated and specific as the good ones. Perhaps it is nothing more than the universal human tendency to generalize.

That said I condemn crooked traders.

Re:You can already buy from alibaba and aliexpress

[Jane Q. Public]

It probably is a mistake to generalize "Alibaba/Aliexpress is usually bad". The bad experiences are as isolated and specific as the good ones. Perhaps it is nothing more than the universal human tendency to generalize.

That said I condemn crooked traders.

Probably. But I wasn't even trying to characterize them as crooked. Just not very responsive.

If I were selling a product in the Czech Republic, or France, or Sweden, I would be willing to pay a couple of bucks to have somebody proofread my ad to make sure it actually made sense there, and especially that there were not things missing or inaccurate.

I am not terribly motivated to buy from sellers who won't bother.

I nomnom ur cakez

[Anonymous Coward]

When I ran a B2B+Dropshipping site with many Chinese suppliers I never found language a problem. My contacts all emailed me in English of a good standard. Maybe that was simply because we were dealing with heavy industry equipment manufacture, and they would tend to have people in-house with international language skills.

Nevertheless, Alibaba could develop in-house or partner for integrated international customer support. I don't see language being a problem if its slotted in correctly. Smart people could get that running.

If Alibaba, and its a big if, do push into the US market, with their existing buying power and network, that obviously gobbles up the margin of domestic importers. Alibaba would be the importer, or partner with importers/warehousing at the container ports. Alibaba then is the go-to domestic supplier at domestic rates. The 'make money selling imported cheap chinese stuff' business model collapses when China itself moves into your market.

Manufacturing was moved to China. China did the heavy lifting for a while. Now China thinks, hey why don't we go direct and rake in that cash ourselves instead of supplying what we make already, like the West thinks we're Santa's Elves? Did anyone really think the West would have its cake and eat it too forever? The business model keeping another large part of the US economy above water will get nom nommed.

My mom uses Alibaba all the time.

[FilmedInNoir]

and She's 60. Alibaba could be a major threat to online businesses as well as brick and mortar stores that rely on selling Chinese made goods at massive markups.
The golden days of middle men is drawing to a close. (See Tesla and Car Dealerships)

Re:My mom uses Alibaba all the time.

[boristdog]

Exactly. Every time I see something I want that is manufactured in China, I go to Alibaba to find out what it REALLY costs.

Re:Lol China

[Anonymous Coward]

Hey bigmouth: You're being called out (why're you running "forrest"?) http://slashdot.org/comments.p...

Already bought stuff from them

[Anonymous Coward]

I laughed when I saw this because I've already bought some stuff from them. It was half the price of anything I could find over here, arrived in good shape and exactly as ordered, and made it across the Pacific in under 2 weeks. I hate to say it but the "entrenched U.S. competition" may indeed have something to worry about as it essentially outs them as the over-glorified middlemen that they are.

Summary Surprise Surprise

[retroworks]

" Critics, citing cultural differences (i.e., consumer branding and shopping preferences) as well as entrenched U.S. competition, say that the company may not be as successful in the U.S. Businesses such as Amazon, eBay, and PayPal already provide the type of services that the Alibaba Group offers. "

I have used Alibaba extensively for more than ten years of B2B trading and was surprised the article would find critics comparing it to Amazon, eBay and Paypal. It is a huge wholesale and B2B trading platform, selling components and raw materials not found on Amazon, Ebay, etc., and has been a major player in the USA for a long time. Less surprising is the fact that no such "criticism" is to be found in the linked articles, or outside the Slashdot summary.

Re:Summary Surprise Surprise

[Anonymous Coward]

The U.S. market is directly in its crosshairs (hence the U.S. public offering). But some say that the company will face large obstacles, including branding issues, heavy competition from established companies (such as Amazon and eBay) and cultural barriers.

"It's not a walk in the park to capture the U.S. market. There are the challenges of competition, consumers and the shopping experiences in the U.S. are just different," Moshe Cohen, assistant professor at Columbia Business School, recently told CNBC. "There's also a big cultural difference and then there is branding."

- cited from the summary's linked article (you retard)

it will fail so hard

[slashmydots]

I tried to get quotes on a shipment of Crucial M500 SSDs from Alibaba.com. I got 2 blatant scams and 8 counterfeits or knock offs and zero legitimate leads from the entire world. I set aside my preconceived notion that everyone in Asia is trying to rip everyone else off and went to Alibaba aaaaaaaaand grabbed back onto that idea in a hurry because it's true.

I tried Aliexpress and holy damn are the prices higher than ebay and amazon for basically every single item I searched for. And it's the same not-so-respectable sellers! So it's like a really expensive amazon.com ran by criminals and scam artists. This is going to fail so unbelievably badly.

Well it is named after a den of thieves ...

[Anonymous Coward]

So it's like a really expensive amazon.com ran by criminals and scam artists.

Well the website is named after Ali Baba, after a guy who discovered a den of thieves and their treasure of stolen goods.

Whether they do business or not

[oDDmON oUT]

Seems like they'd be the last online marketplace to ever collect US taxes.

Which could be a feature, not a flaw.