I heard on TV that Amazon has more than 40% of the online shopping market, but total on-line sales are less than 9% of total retail sales. Presumably those figures refer to the US market.
I continue to like BABA as my sole Chinese stock. What Amazon can do ,Alibaba can do too, copy if needed, and they have a TAM of all those billions of people in China and SE Asia.
True ,their customers can’t afford to buy as much as Amazon’s customers, but there are so many more of them.
And unlike the US where incomes and wealth growth is stagnant except for the top 5% or so, disposable income for most is growing fast in the BABA service area. Absent a war or some other catastrophe it seems likely that Alibaba will be much ,much bigger a decade from now.
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True ,their customers can’t afford to buy as much as Amazon’s customers, but there are so many more of them.
Well, no, not really. Over 70% of the Chinese still live in or very close to poverty. Of those remaining over half are too young or too old to shop online. That leaves a TAM of about 200,000,000, not too much more than the US.
As for the remainder of SE Asia, BABA does not have the same presence as it has in China. International revenues for Ali Baba amount to less than 9% of its total revenue.
And, BABA is not the only game in China. There’s JD.com with net revenues of $28B JD.com owns about 23% - 24% of the Chinese BtoC ecommerce market while Ali Baba owns 57% - 58%. JD.com has far more control over its supply chain than Ali Baba and has a reputation for authentic, quality products while Ali Baba suffers from repeated scandals related to counterfeit products. There are also a lot of lesser known ecommerce competitors in China.
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too old to shop online
you may be a young guy but I can assure you many octogenarians like me shop on line. . I assume Chinese are equally non decrepit. The older ones I have met seem very spry, diet? genes?
Plenty of 10 and 12 year olds shop on line too
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Your 200 million figure is just wrong…
https://www.web2asia.com/2017/03/02/goldman-report-china-onl…
https://www.emarketer.com/Article/China-Eclipses-US-Become-W…
http://www.businessinsider.com/china-retail-e-commerce-sales…
https://www.google.com/url?sa=i&rct=j&q=&esrc=s&…
As investors what counts is stock performance ,not opinions,
And BABA as done very well. Way better than AMZN. I used to own AMZN too, sold it a bit too soon. It is not a matter of either/or . At some point I might rebuy AMZN. Though in fact it has less than 50% of US on line shopping, and is making most of it’s money from AWS.
maybe I should look into JD com too.
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I’m a septuagenarian so you’ve not got many years on me.
My wife is Chinese. I spend a lot of time in China. My time there is not spent on business matters. I’m in people’s homes mostly for social reasons. I know from my experience there that the older folks do not generally shop online. The Chinese are not as wired as the Americans, especially the older generation (by that I mean 60+). But, I’ll grant that most of my time is spent in one city. I just think it unlikely that shopping behavior is regional. I’m quite certain it’s a cultural phenomena. However, the youth behave very differently. A very common sight is to see a young man walking on the street with a pack of cigarettes in one hand and a mobile phone in the other.
Plenty of 10 - 12 year olds may shop online in the US. Not so in China. Not from my experience there.
Yes, I suppose my estimate may be somewhat off as it’s almost 10 years off by now when I was considering starting a business in China. I didn’t take that into account. But be careful about putting too much faith in the numbers generated by big investment firms. At times they’ve been known to be motivated by factors other than the simple truth. And stats published by the Chinese government have been notorious for inaccuracies, though they’ve improved a lot since Xi Jinping has been running the show.
In any case, I wish you well with your investing activities. Just because I’m one voice somewhat leery of investing in Chinese companies doesn’t mean you can’t find good Chinese investments. I just choose to look elsewhere mostly due to my experience, observations and knowledge of China.
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Brittlerock I am leery of Chinese companies too. BABA is my sole Chinese company. BABA has done very well for me.
Unless you count SHOP (Canadian) I have sold the remaining non US companies too.
A smaller percentage of Chinese is still a lot of people.
Mauser - relax about BABA.
China has many more than 200m users.
Ali Baba alone has 500m monthly active users.
https://www.statista.com/statistics/226927/alibaba-cumulativ…
Most mobile service providers (and I believe Ali Baba has more mobile than pc based internet users) have 400-900m users (fact check BABA and Tencent’s WeChat).
Young and Old people are doing more online via mobile than the west.
AliBaba has access to 600m pop in SEA - much of which has amazing smart phone penetration - singapore the highest has 120% (ie more than one smart phone per person on average).
https://data.gov.sg/dataset/mobile-penetration-rate
There are no suburban Malls here in SE Asia (there are no suburbs). There are convenience stores and city center shopping Malls. For everyone else there’s just wet markets or the internet.
Then there’s Ali Baba’s play in India another billion population - with the fastest growing smart phone market and middle class in the world.
Check the facts and place your investments. Don’t get distracted by alternative/also ran side shows like JD (that could be a good investment but is no BABA). Sure JD also has some core commerce but Ali Baba has the equivalent of AWS, PayPal, eBay, You Tube…
Ali Baba and Tencent are taking over the world. That’s all you need to know.
Did British companies take over the world after the industrial revolution. Yes.
Did American companies take over the world as it industrialised. Yes
Did Japanese companies take over world when they industrialised (with arguably a more closed economy than China)? Yes.
Do you think a few of the leading Chinese companies might takeover the world as it industrialises?
America was the Wild West once - it didn’t stop it growing and dominating the planet with just a few hundred million people.
Sure you can look at China now and call it the wild east - it has a billion plus people, is internationalizing and industrialising.
I will leave you to join the dots. But in the meantime…
Relax about Ali Baba.
Ant
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