Alibaba is the new threat to Amazon - Remke Blog

If you’ve never heard of Alibaba, it won’t last for long. From the looks of it, Alibaba will be a household name soon, possibly more common than Amazon.

So who are they and what do they want from the electrical industry?

Alibaba and the threat they pose to the US Distribution chainAlibaba is a Chinese based distributor that some describe as a cross between Amazon and EBay. They describe themselves as the “largest online and mobile commerce company in the world”.

Wall Street and the electrical industry are keeping a close eye on Alibaba because of their capacity to sell B2B. This gives them an additional way to continue growing and increasing profits. Whether or not they will have a strong presence in the electrical industry remains unclear, but with their sheer size, it is expected that they will have an impact.

This article from tED Magazine outlines the company and why we should keep an eye on them. Click to read the full article “Alibaba Could Become a Bigger Threat to Distribution than AmazonSupply”, published Sept 7, 2014.

The article cites the sheer size of Alibaba as the biggest threat. Their IPO is expected to be the biggest ever and estimate the value of the company at $167 Billion (compared to Amazon’s $160 Billion Value). They are expected to raise $25.3 Billion in the upcoming IPO to help them expand even further in the US.

Looking at their current financials, the threat is real. In the quarter ending June 30, revenue increased 46% from last year, while earnings increased 60% to nearly $1.2 Billion.

We’ll definitely be keeping an eye on Alibaba, along with many other manufacturers and distributors. Tell us what you think in the comments below.

UPDATE: Alibaba stock premiered on Wall Street today, Sept 19, for a whopping $92.70 per share,  well exceeding the $68 expectation. It quickly grew to a high of $99.70 in active trading. Read more on Reuters.com