Alibaba: The next Facebook?

Most people will probably have heard of Amazon and eBay, but not the world's largest e-commerce company - which is the Chinese firm, Alibaba.

The Alibaba Group is larger than Amazon and eBay combined.
Unless you're in the supply chain business, few are likely to have heard of it before. It's because the company operates predominantly in China.
Think of Alibaba as a company that is a combination of eBay and Amazon. It is an online company with multiple revenue streams that are more conventional than a social network site.
Alibaba.com is a B-to-B, or business-to-business, website. It links up businesses around the world looking for suppliers. For instance, they link wholesalers to distributors around the world, from the UK to China to the US.

Alibaba refers to the adventurer in the Arabian Nights who sought treasure in exotic places - though these days it is less treasure and more Downton Abbey memorabilia.
Its online marketplace, Tao Bao, is similar to eBay. Its name also makes a reference to finding treasure. Its considerable presence in the online retail space has led to its use by some analysts as a proxy for Chinese retail price inflation. In fact, Tao Bao is so successful that eBay closed down its Chinese site.
An offshoot is called T-mall, where domestic and increasingly foreign companies like M&S can set up an online storefront to try and reach its half a billion Chinese customers, according to the company's calculations.
It also has an online payment service known as AliPay, which is like PayPal, and is valuable for an economy developing its financial services. Alibaba also recently bought a share in Sina Weibo, which is like China's Twitter.
By the end of this year, the online market in China is expected to surpass that of the US. By the end of the decade, Alibaba estimates that China will be larger than the US and Europe combined.
This is why there is such interest in China's new global companies.

Afternoon tea in Shanghai: Grown in China, packaged in the UK and sold on Alibaba

Buying into the next Facebook As with other Chinese companies that are coming of age, Alibaba is ready to go global and go public, which means that the company will soon list on a stock exchange and sell shares to the public.
The chance to buy into what is potentially the next Facebook unsurprisingly means there's a lot of interest. It is so high that analysts think that its initial public offering (IPO) could rival Facebook's $104bn (£67bn) offering.