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Failed student whose Pounds 140bn websites outsell eBay & Amazon ; Chinese firm is world's biggest flotation [Mirror (UK)]
[September 20, 2014]

Failed student whose Pounds 140bn websites outsell eBay & Amazon ; Chinese firm is world's biggest flotation [Mirror (UK)]


(Mirror (UK) Via Acquire Media NewsEdge) A CHINESE internet firm started by a former English teacher was catapulted into the business superleague last night.

Online retail giant Alibaba was valued at Pounds 140billion, more than Walt Disney and Coca-Cola, after the biggest stockmarket flotation in US history.

The successful share sale saw the fortune of founder Jack Ma swell to Pounds 11billion, confirming him as China's richest man.

Mr Ma, known for his flamboyant gestures including dressing up as Lady Gaga for a staff event, has come a long way from his humble beginnings.

The 50-year-old was born in the Chinese city of Hangzhou, but twice failed his college entrance exam.

He later enrolled on a teacher training course before working as an English teacher on less than Pounds 10 a month.

A visit to the US in 1995 saw him realise the potential of the internet - and four years later, he launched a website allowing firms to buy and sell goods online.

Alibaba now accounts for more than 80% of internet retail sales in China, and handles more transactions than eBay and Amazon combined.

The firm raised more than Pounds 15billion from yesterday's share sale, which it will use to expand its businesses in the US and Europe, where it is widely unknown.

The shares, priced at $68 (Pounds 42) each, soared to $92 (Pounds 56) amid investor fever.



Mr Ma, who attended the New York Stock Exchange launch, predicted the number of online orders in China would rocket within a decade from the current 27 million packages a day to more than 200 million a day.

Peter Garnry, head of equity strategy at Saxo Bank, said: "Online shopping in China is still a very small proportion of total consumption so the growth potential is enormous.


"It is the backbone of the transition in China to being a consumer economy." Mr Ma's inspiration was the main character in Hollywood film Forrest Gump.

He explained: "Forrest Gump is not a smart guy, but he is focused. He's not talented, but he is very, very hard-working." Yesterday's share sale was also lucrative for internet search engine Yahoo, which owns 22% of the business, and workers who were handed Pounds 2.8billion worth of stock. Mr Ma, who set up Alibaba with Pounds 37,000 borrowed from 18 people, came up with the name in a coffee shop in San Francisco.

He asked a waitress what she knew about Ali Baba and she replied: "Open Sesame." The name reflects how the business opens up opportunities for small businesses to sell their goods.

Mr Ma paid nearly Pounds 120millon for a half stake in Chinese football club Guangzhou Evergrande FC this year, calling it "investing in happiness".

[email protected] What is Alibaba? Alibaba.com The group's first business, a website that allows companies around the world to find a manufacturer in China Taobao China's largest shopping website Tmall Offers a wide selection of branded goods to China's emerging middle class Alipay Online payment system, like Paypal Sina Weibo The group has a stake in China's version of Twitter Youku Tudou Stake in China's biggest video site, similar to YouTube Cainiao Logistics operation that provides realtime information for buyers and sellers Alibaba Pictures A film production company (c) 2014 ProQuest Information and Learning Company; All Rights Reserved.

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