The Wall Street Journal reports, Chinese e-commerce giant Alibaba Group Holding Ltd. said Sunday that it has decided to start the process of listing on a U.S. stock exchange, bringing to New York what could be one of the largest Internet initial public offerings in history.
In a brief statement posted in its website, Alibaba said a U.S. IPO—which people familiar with the matter said could raise as much as $15 billion—would "make us a more global company and enhance the company's transparency."
Alibaba's financial affiliates, such as the ones that run its Alipay electronic payment service and Yu'E Bao money-market fund, won't be included in the currently planned IPO, the person said.
Alibaba's statement sets the stage for the biggest U.S. IPO ever of a Chinese company. A $15 billion listing would top the dual New York-Hong Kong $5.7 billion listing of China Unicom Ltd.
Alibaba's statement also appears to close the door finally on listing on the Hong Kong bourse, which had been vying with New York exchanges for the deal, but objected to some of Alibaba's proposed listing terms. Alibaba may consider listing its shares in China in the future, the company said in Sunday's statement, though it didn't mention any specific plans.
"We respect the viewpoints and policies of Hong Kong and will continue to pay close attention to and support the process of innovation and development of Hong Kong," Alibaba said in Sunday's statement.
China's e-commerce market is already bigger than the U.S. market by some measures, and Alibaba dominates that market. Alibaba's most popular websites, Taobao and Tmall, are marketplaces where many merchants sell items directly to consumers.
China's e-commerce market is already bigger than the U.S. market by some measures, and Alibaba dominates that market. Alibaba's most popular websites, Taobao and Tmall, are marketplaces where many merchants sell items directly to consumers.
Total gross merchandise traded on Alibaba's e-commerce sites last year was $240 billion, according to a person with knowledge of the figures. By comparison, the equivalent figure for Amazon.com Inc. last year was roughly $100 billion, according to Forrester Research.
Alibaba's revenues are far smaller than Amazon's because the Chinese company doesn't directly sell the products on its sites. But Alibaba's business is highly profitable because many merchants who use its websites pay for advertising and other additional services.
In the three months through September, the most recent numbers available, Alibaba's revenue rose 51% to $1.78 billion from a year earlier. Net profit stood at $792 million, giving the company a net profit margin of 44.6%, according to shareholder Yahoo Inc., which owns a 24% stake in Alibaba. In the same quarter, Amazon posted a loss of $41 million on revenue of $17.09 billion.
