The AliBaba group is China's biggest online commerce company, and also probably the biggest in the world ever. Here's a fantastic explanation by the Wall Street Journal, with lots of pretty pictures and infographics, that sums it up nicely.
AliExpress is one of their sites that specialises in selling Chinese products to Global consumers. Businesses wanting to buy wholesale goods in bulk buy from AliBaba.com, generally.
Proportionally, not a lot of people know about AliBaba in the Western world, but that is going to change. AliBaba is connecting Chinese producers to consumers worldwide, cutting out intermediaries, ie the retail sector. It's a recipe for success in this globalised world.
Before we discuss what AliBaba's success in Wall Street means, we'll have to do some learning. I've done a Finance 101 paper, so I sort of understand this stuff, and hopefully can translate money talk into simpler language.
AliBaba recently issued what is called an Initial Public Offering (IPO), which means it is now possible to buy 'Shares' of the company. A Share, or Stock, is an investment in the company. You pay them for the Share and receive payments as they use all the money collected from selling Shares to grow as a business. As the business grows, they can afford to start paying you back for investing in them. If they do well, you'll earn more than what you paid for the Share. If they don't do well, you'll make a loss. Also, a Share enables you a say in the company's operations, one vote per Share.
The IPO is a big deal because a company stands to earn a lot of money from selling Shares, and it shows how much confidence financial experts have in the business. AliBaba raised BILLIONS. Like, MULTIPLE BILLIONS. About US$21.8 billion on its first day of trading.
This means two major things for us AliExpress fans: 1) AliBaba have the funds to sustain and majorly improve AliExpress and other sites, and 2) People who know a thing or two about companies are predicting that AliBaba is going to be around for a while, doing some seriously major scale business.
Some companies don't have a big IPO and still go on to become massive, such as Google, and some companies offer IPOs when they're already a big deal, such as Facebook. It can mean a lot of things, but the main thing it will provide is opportunities for AliBaba to tighten its hold on the e-commerce market. AliBaba is now one of the biggest tech companies in the world and is going to be a huge part of the expanse of the Technological Age we're living in.
As for Absolootely, it means we totally jumped aboard the right bandwagon.
If you're interested/as big a business nerd as me, here's AliBaba's IPO Prospectus, which has some details as to how the company plans to expand and other such insights.
Contributor: Kate, @Springerfield
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