Alibaba

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#51
http://www.todayonline.com/tech/chinas-a...epage=true

At China’s Alibaba, chairman Ma’s dealings raise red flags
At China’s Alibaba, chairman Ma’s dealings raise red flags
Mr Jack Ma, chairman of China's largest e-commerce firm Alibaba Group, gestures during a conference in Hong Kong, on March 20, 2012. Photo: AP
Alibaba’s IP prospectus highlights longstanding questions about the company’s complex corporate structure and conflicts of interest surrounding Ma
PUBLISHED: MAY 8, 3:50 PM(PAGE 1 OF 1) - PAGINATE
SAN FRANCISCO/BEIJING — Part-way through Alibaba’s long-awaited IPO prospectus was a subtle, but striking, warning: Investors should know that lead founder and executive chairman Jack Ma might work against the company’s best interests.

The acknowledgement, on page 42 of a 300-plus-page filing, highlighted longstanding questions about the Chinese e-commerce giant’s complex corporate structure and potential conflicts of interests surrounding Mr Ma, who started Alibaba in his one-room apartment in 1999 and has since branched out into markets as diverse as e-payments and financial investment.

To be sure, such warnings of potential conflicts were included in the prospectuses of many founder-controlled tech companies, including Facebook and LinkedIn. But Alibaba’s warning stands out given Mr Ma’s numerous investments in third-party firms that partner with his company.

One hot-button issue is Mr Ma’s control of Alipay, the PayPal-like affiliate established by Alibaba in 2004, which continues to provide the lions’ share of payment services for the company’s retail marketplaces.

Four years ago, Alibaba spun out Alipay to a group including Mr Ma, who holds a 46 per cent stake in Alipay through another company, Zhejiang Alibaba.

A row ensued: Alibaba investors including Yahoo and SoftBank objected to the spinoff, which Mr Ma argued was needed to comply with Chinese central bank regulations governing foreign ownership of financial firms.

Alibaba, Yahoo and SoftBank settled the matter in 2011, but not before Mr David Einhorn, the Greenlight Capital hedge fund manager, sold all of his Yahoo shares in frustration at what he deemed mutual “finger-pointing” between the companies.

Alibaba reiterated on Tuesday (May 6) its longstanding position that the 2010 spinoff was intended to conform with central bank regulations.

But it also said no such rules were in place. “At the time when the licences were first issued, no such additional regulations governing foreign-owned payment companies had been put in place.”

The company declined to comment beyond the prospectus on the matter of Mr Ma’s potential conflict or his investments. It also declined to comment on media reports that it is in talks to buy back a stake in the payments firm, or whether Mr Ma would recuse himself from any Alipay talks.

UNWANTED ATTENTION

Beyond Alipay, analysts and attorneys say they are concerned about Mr Ma and Alibaba’s related-party transactions and “variable interest entities” — firms associated with Alibaba in which Mr Ma has a holding.

In the prospectus, Alibaba says structures such as “variable interest entities” are to its benefit. The investments give Alibaba flexibility in the face of Chinese regulation. Mr Ma can assume legal ownership of a company and agree to transfer “all economic benefits” to Alibaba when legally permitted, the prospectus said.

According to Tuesday’s prospectus, Mr Ma has a 40 per cent stake in “several entities” with ties to Yunfeng Capital, an investment firm that has operated alongside Alibaba.

“You’ve got this complex web of variable interest entities, limited shareholder voting rights,” said Associate Professor of finance Jim Angel, at Georgetown University. “There’s definitely a lot of questions over this offering, but there’s no doubt that Alibaba is a major e-commerce play.”

The deals can be complex. Last month, Alibaba agreed to loan 6.5 billion yuan (S$1.3 billion) to co-founder Simon Xie. Through another company formed with Mr Ma, Mr Xie would then purchase a minority stake in Wasu Media, an Internet TV firm. Alibaba at the time announced it had reached a cooperation deal with Wasu Digital TV, the listed company’s parent. It did not mention the loans or investment.

Alibaba also holds a stake in a separate TV and film company, and M&A lawyers have said the purchase could have been designed to circumvent anti-competition rules.

“This arrangement certainly raises serious questions about corporate governance,” a Beijing-based attorney at a multinational law firm said when the investment was made. The person declined to be identified because of the sensitivity of the matter.

“Alibaba’s tendency to do these kinds of deals makes the company appear to be cavalier about these kinds of conflicts. Here you have a guy in senior management taking 6 billion yuan out of his company to make an investment in another firm that he controls.”

Mr Ma’s investments do not ring alarm bells for everyone.

“This is one of those risk factors they have to tell you about, but you don’t have to worry about it as long as Jack Ma retains a meaningful stake in Alibaba,” said Ms Lise Buyer, an IPO advisor who guided Google’s 2004 offering.

“This seems to me that something investors should be aware of, but not something they should be particularly nervous about at this stage in the company’s life,” Ms Buyer said. “Call me in a year.”

But Ms Buyer raised another issue — the fact that Alibaba had just four board members. It intends to expand that to nine, but investors should wait to see who gets appointed before its listing, she said. “It would be nice to see that before putting your money down,” she said. REUTERS
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#52
Is the partnership revealed modeled from China political system? Power is concentrated in a small carefully selected group...Tongue

Alibaba unveils big names in partnership, board

NEW YORK — Alibaba Group Holding has revealed the members of its powerful 27-person partnership and board, while disclosing that the Chinese e-commerce giant’s revenue growth had slowed from the red-hot pace in recent quarters.

In an updated prospectus for what could be the largest technology initial public offering (IPO) in history, Alibaba said on Monday that the partnership includes founder Jack Ma, executive vice-chairman Joseph Tsai and chief executive Jonathan Lu.

The group has the exclusive right to nominate a majority of Alibaba’s nine-member board, effectively ensuring control of the company rests in the hands of insiders. Alibaba’s partnership was a key factor in its decision to seek a listing in the United States rather than Hong Kong, where such corporate structures are not allowed.
...
http://www.todayonline.com/business/alib...ship-board
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#53
Interesting observation of China's 25-person Politburo and 7-person standing comm (was previously 9-person)
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
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#54
(18-06-2014, 12:24 PM)specuvestor Wrote: Interesting observation of China's 25-person Politburo and 7-person standing comm (was previously 9-person)

Might be the only management system Jack Ma familiar with and confident on, to ensure the growth story of Alibaba. Big Grin
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#55
For Alibaba, a challenge is to turn mobile into money
1089 words
1 Jul 2014
Reuters News
LBA
English
© 2014 Reuters Limited
* Alibaba the king of online retail on personal computers in China

* E-commerce giant now trying to boost transactions on mobile devices

* But purchases on mobiles generate less money for Alibaba

* Rival Tencent already making inroads on mobile transactions

* Alibaba headed for big IPO in New York this year

By Paul Carsten

BEIJING, July 1 (Reuters) - Chinese e-commerce giant Alibaba Group Holding Ltd may have dominated online retail on personal computers, but is some way from replicating that leadership in shopping by smartphone and other mobile devices.

Alibaba, which is heading towards a bumper New York IPO later this year, is throwing billions of dollars at figuring out how to thrive as half a billion people, 80 percent of China's 618 million internet users, go online via mobile.

The Hangzhou-based firm said last month that mobile has become an increasing source of transactions, now accounting for more than a quarter of the value of goods sold across its online marketplaces. But Alibaba's shift to wireless commerce is a double-edged sword: mobile commerce brings in significantly less revenue than traditional e-commerce.

The quick-hit impulse buys commonly seen on mobile generate less money for merchants, and advertising on smartphones is a challenge few internet companies have overcome. Both problems threaten to squeeze future profitability.

Making life tougher, rival Tencent Holdings Ltd has already planted its flag on smartphone screens with WeChat, the nearly ubiquitous app that has gone from a mobile messaging tool to a digital Swiss Army knife.

"They're not just competing with other e-commerce companies, they're going against messaging apps. It completely changes how competitive they can be," said Sameer Singh, an analyst who writes about technology at Tech-Thoughts.net. "I don't think the same margins are realistic."

Alibaba has spent more than $3 billion this year on mobile-focused investments. In its latest initial public offering prospectus, filed in the United States last month, "mobile" was mentioned 304 times - well ahead of "online" (264) and "internet" (144), while "computer" figured just 36 times.

ON THE DEFENSIVE

Alibaba's leadership is still trying to shore up the firm's position on mobile, even as the competition surges ahead, said people familiar with the matter.

This includes Alibaba moving beyond its comfort zone and attempting to control how users access content on their mobile devices - though Laiwang, its attempt at a social messaging app to rival WeChat, has seen little traction among users in China.

Alibaba has also invested in Tango, a U.S. messaging app company, and spent more than $1 billion apiece for full ownership of mobile browser UCWeb Inc and digital mapping firm AutoNavi Holdings Ltd.

While these new ventures are in their early stages, Alibaba admits that profitability could suffer.

"Our strategic investments and acquisitions may affect our future financial results, including by decreasing our margins and net income," it said in its IPO filing. "Increases in our costs may materially and adversely affect our business and profitability, and there can be no assurance that we will be able to sustain our net income growth rates or our margins."

Alibaba has also driven the mobile percentage of gross merchandise volume (GMV) - the value of goods transacted through its businesses - to 27.4 percent of the group's total GMV in January-March, up from 10.7 percent a year earlier.

But while mobile may already account for more than a quarter of all transactions, it's far less profitable than the rest of Alibaba's e-commerce business. For January-March, mobile made up just one eighth of total online retail revenue.

Nevertheless, monetisation is improving. Alibaba's mobile monetisation rate - mobile revenue as a percentage of GMV - jumped in January-March to 0.98 percent from 0.47 percent a year earlier, but still less than half of the overall e-commerce monetisation rate.

TRAFFIC POLICE

While Alibaba is making progress in its transition to mobile, Tencent's WeChat holds the aces.

Tencent doesn't break down its WeChat users between domestic and overseas, but with close to 400 million monthly active users as of end-March, and overseas user numbers still limited, that could mean that close to four of every five mobile internet users in China is on WeChat.

WeChat started out as a messaging app similar to WhatsApp , but with stickers and emoticons and the ability to leave short voice messages. Today, WeChat, known in China as 'Weixin' (micromessage), allows users to book a taxi, find a nearby restaurant, get a deal on movie tickets, read the news and, like Facebook, update their social network profile.

"Of course everybody uses a communications app, WeChat," Joe Tsai, Alibaba's executive vice-chairman, told Reuters in an interview in March. "But that's communications, not commerce."

"A user coming to use the commerce function is much, much more valuable ... we're very focused on driving usage and engagement on our e-commerce apps," he said.

Tencent, though, isn't just in communications. In March, the Shenzhen-based social networking and gaming company bought a 15 percent stake in JD.com, China's No.2 e-commerce firm and Alibaba's main online shopping rival. By tying JD.com's online shopping into WeChat, Tencent has begun funnelling its hundreds of millions of users directly to Alibaba's competitor.

Last week, Tencent also bought a 20 percent stake in 58.com Inc, known as the Craigslist of China, in a bid to improve its location-based e-commerce business on WeChat and its other social networks.

Baidu Inc, China's biggest online search engine, is another of China's internet traffic gatekeepers. Its search app is widely pre-installed on Chinese smartphones, allowing the Beijing-based firm to dictate the results its users see and the websites they visit.

Alibaba depends on its user traffic to encourage its customers, the online merchants, to pay for advertising, its most lucrative source of revenue. In the year ended March 2014, more than half of Alibaba's total sales came from online marketing services.

"Advertising has always been much less profitable on mobile," said Ben Thompson, who writes about technology at stratechery.com in Taipei. "The challenge for Alibaba is figuring out a model that works for mobile, much like Facebook had to do." (Additional reporting by Deepa Seetharaman in SAN FRANCISCO; Editing by Ian Geoghegan and Dean Yates)


Thomson Reuters (Markets) LLC

Document LBA0000020140630ea6u00db3
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#56
What a competitive New China market in China...Big Grin

Alibaba-backed Kuaidi challenges Uber in China with luxury cars

HONG KONG – Hangzhou Kuaidi Technology, a taxi-booking service backed by Alibaba Group Holding, is adding luxury cars in China to boost revenue as it steps up its challenge to Uber Technologies, the Bloomberg news agency reported.

Kuaidi is targeting wealthy travellers with a new smartphone application as it partners with chauffeur companies in Beijing, Shanghai, Guangzhou and Hangzhou, Chief Executive Officer Dexter Lu said in an interview. The new cars include the 5-Series from Bayerische Motoren Werke and Audi’s A6.

Uber and Kuaidi are competing with Didi Taxi, which is backed by Tencent Holdings, for a bigger slice of China’s 500 million users who access the Internet from their phones and are boosting use of location-based services. The new app, known as “Yi Hao Zhuan Che” in Chinese, is part of Mr Lu’s push for a revenue model to sustain the business, which generated 50 million yuan (S$10 million) of sales last month.

“We operate under a similar model as Uber does in China,” Mr Lu said. “Our work load will be very heavy in the second half, but it’s also very exciting.”
...
http://www.todayonline.com/business/alib...uxury-cars
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#57
Anyone use Grabtaxi in SG?


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"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#58
(07-07-2014, 09:38 PM)opmi Wrote: Anyone use Grabtaxi in SG?


Sent from my iPhone using Tapatalk

I do. Works quite well. Initially there were no taxis, now there's plenty, apparently 20,000 or something, so the biggest "fleet" in Singapore now.
---
I do not give stock tips. So please do not ask, because you shall not receive.
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#59
i think the new economy/technology empowers the consumer.
Better and more effective delivery of goods and services to the end consumer.
Makes life difficult for the traditional businesses. Businesses w/o a wide moat are doomed.
Even banks are not spared with institutions with banking functions popping up.
So the old folks are right, be a doctor or a lawyer ... where the profession is heavily guarded/regulated.
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#60
power to the consumer is greatx! Big Grin
no more extortion!
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
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