As the Alibaba F1 hits the SEC, we see a light into a company that is the Chinese equivalent of Amazon, eBay and Paypal; and one with aspirations to be the domestic equivalent of YouTube via its investment in Youku Tudou, and Twitter, via its investment in Sina's Weibo. To find a company with as broad a set of digital businesses and aspirations, only Google comes to mind.
From the F1, Alibaba makes the case that its opportunity is much bigger than that of a U.S. internet company. Retail space in the U.S. is 2.6 meters per capita compared to just 0.6 in China, making online commerce an even bigger opportunity.
As far as mobile goes, 19.7 percent of merchandise value purchased on Alibaba was via mobile, representing 76 percent of all mobile retail in China. And the F1 states that only 7.9 percent of Chinese consumption is online. This suggests that Alibaba is dominant in mobile commerce and has lots of head room for top line growth. The company utilizes 14 delivery partners that employ 950,000 delivery personnel.
Alibaba even has partial ownership rights on Alipay, which processed 78.6 percent of its transactions in the past year. In the event of Alipay achieving liquidity, Alibaba gets 37.5 percent of the equity value, which could range for $2 billion to $6 billion.
Alipay processed $519 billion last year. Alipay does however bear some regulatory risk.