Alibaba Finally Gets the Cash to Build Something Valuable
If you read this post, you already know my views on Alibaba as a global sourcing resource. But now that they're finally public as of today and trading at 155 times next years earnings, perhaps they will have raised enough capital to actually build something useful for global sourcing professionals (or they could just buy Ariba which trades at 3-4% of their valuation).
BTW ... does anyone else think that it's an absolute joke that the Bloomberg positioned them as a "B2B Market Leader"? Seriously, their coverage notes that "in the quarter ended June 30, Alibaba accounted for 43 percent of total transactions in the so-called business-to- business e-commerce market in China, more than triple its nearest rival, Global Sources Ltd., according to estimates by Analysis International ... The company charges suppliers from China and Hong Kong an annual fee to become so-called premium members, which enables them to gain preferential access to buyers." Fast Spend Matters poll: is there anyone in the Spend Matters community who actually looks to Alibaba as a critical piece of their China supplier identification and sourcing strategy?
- Jason Busch
BTW ... does anyone else think that it's an absolute joke that the Bloomberg positioned them as a "B2B Market Leader"? Seriously, their coverage notes that "in the quarter ended June 30, Alibaba accounted for 43 percent of total transactions in the so-called business-to- business e-commerce market in China, more than triple its nearest rival, Global Sources Ltd., according to estimates by Analysis International ... The company charges suppliers from China and Hong Kong an annual fee to become so-called premium members, which enables them to gain preferential access to buyers." Fast Spend Matters poll: is there anyone in the Spend Matters community who actually looks to Alibaba as a critical piece of their China supplier identification and sourcing strategy?
- Jason Busch
And as for the "B2B Market Leader" rankings, you have a point - If you consider B2B to only be IBM buying from Cisco, and Tyco buying from Accenture. Who said B2B had to only be the Fortune 500 buying from each other?
I do have a whole "Why Ariba should buy Alibaba or build one" Powerpoint presentation floating around here someplace. It didn't have much of an audience at the time. And while I agree that it doesn't have much appeal to a Fortune 500 sourcing professional, that's 25 billion they can kiss bye bye.
Maybe I am missing something. Yes, the press release sounds great, but just about everyone I meet or talk to who uses Alibaba either sell on EBay, or could not buy enough quantity to source products using what I would consider a real Product Sourcing Firm.
Not to knock what Alibaba does, because there is a need in the marketplace for their services. But, I just do not see them as a leader in the Strategic Global Product Sourcing arena.
So yes, I do agree with your assessment of Bloomberg's B2B Market Leader comment. It's a stretch at best.
But, as stated, many other factors must be addressed before it can be called a strategic sourcing tool...