The WSJ reports, "Alibaba Group has gone from dipping a toe in international waters to dunking a whole foot. It may be some time before it's worth diving in all the way.
The Chinese e-commerce giant, which is preparing for what could be the largest ever U.S. initial public offering, sent the strongest signal yet of its intention to expand outside China by acquiring a 10% stake in Singapore Post for $249 million. The likes of Amazon and eBay shouldn't quiver in their boots just yet.
Earlier this week Alibaba stuck a deal with Australia Post aimed at helping Australian companies sell wares into China through its online retail sites, Taobao and Tmall. But the SingPost deal seems oriented the other way—at helping Chinese merchants reach Southeast Asian customers. Singapore is the region's hub, and the joint announcement boasts of state-linked SingPost's ability to offer warehousing, delivery and product returns.
Alibaba was founded as a site that connects global companies to Chinese parts and components suppliers, but the bulk of its business today is retail and consumer-to-consumer trading within China. It has been cautious in expanding consumer operations outside mainland China, with Chinese-language Taobao sites in Hong Kong and Taiwan".
"Alibaba's foreign forays offer intriguing hints of its long-term ambitions. And the deal with SingPost creates a platform it might learn from, expand or replicate elsewhere. But potential IPO investors should stay focused on domestic growth. Alibaba's home fires burn brightest".
