Markets

Vinexpo partners with Alibaba in China and reboots NYC event

Vinexpo partners with Alibaba in China and reboots NYC event

Ma, who is worth £22.8 billion ($28.4 billion), warned that people should not be making machines that work like humans. You might have a great product that people in the USA love, but that doesn't mean it's going to automatically be a hit in China.

Ma's message: Doing business in China via e-commerce sites such as Alibaba proves ideal for small businesses and entrepreneurs like many found in Detroit. Alibaba has even grander ambitions, however.

Alibaba Group Holdings (BABA) stock is up 58% this year in US trading as the company talks up global expansion. Where Amazon.com Inc has built world-class logistics operations to speed and standardise delivery, Alibaba has opted for an asset-light approach, in which customers ship directly to other customers through third-party logistics operators with warehouses throughout China.

By any measure, Alibaba dominates online retail in China. It's expected to draw small businesses from 48 states that are interested in entering the Chinese market, which has bypassed the US this year to become the world's biggest retail market. eMarketer pegs the market opportunity at $4.89 trillion, while the USA stands at $4.82 trillion. In fact, Alibaba's share of the cloud infrastructure-as-a-service (IaaS) in China is estimated to be more than 40%, and its 2016 IaaS revenue was equivalent to that of its seven closest competitors combined.

The launch is part of Alibaba's globalisation strategy.

Chinese investment in the United States exceeded that of the United States in China for the first time in 2015, reaching US$15.3 billion while the figure the other way was US$13.8 billion, according to the China Investment Monitor, a database compiled by New York-based Rhodium Group.




Vinexpo has announced an agreement with leading Chinese online platform Alibaba to promote recognition of the exhibition brand in China and deliver a partnership with its annual 9 September wine fair. But Alibaba is also after Western goods.

The impact of these investments - as well as Alibaba's dominant competitive positioning - can be seen in its financial results. Just as Google operates auctions for companies to place ads in search results, Alibaba charges sellers to direct traffic to their e-shop.

Incredibly, management projects Alibaba's revenue to continue to rise at a torrid pace in the year ahead, to the tune of 45% to 49% in fiscal 2018.

For the past five years, Alibaba has been projecting that it would hit $1 trillion in sales by 2020, a claim it doubled down on earlier this month at its investor conference. Shares are now trading at about 30 times analysts' estimates for fiscal 2018 and 23 times their projections for 2019.

He told CNBC at the Gateway '17 conference this week that small businesses are starting to gain more exposure on the Internet, and this has lessened the power of massive firms. Alibaba's online platforms account for 80% of all e-commerce in China. Thus, investors who buy today should be well rewarded over the years - and potentially, decades - to come.


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