- Alibaba Group Holding Ltd. is the world’s largest e-commerce operation measured in terms of gross merchandise value (GMV).
- The company is based in Hong Kong, a special administrative region of the People’s Republic of China, and primarily serves China and Southeast Asia.
- During 2020, when efforts to contain the COVID-19 pandemic were ravaging economies worldwide, China saw infections drop dramatically and was the only major world economy to record positive growth.
- Although Alibaba’s primary focus is e-commerce, its reach is expanding, with subsidiary involvements in sectors ranging from news media and entertainment production to cloud computing and e-payments.
Alibaba Group Holding Ltd. (NYSE: BABA) is an e-commerce powerhouse based in Hong Kong. Alibaba is frequently referred to as the ‘Amazon of China’ in recognition of its broad reach and immense popularity with consumers in China and Southeast Asia, boasting the world’s largest online and mobile merchandising operation measured in terms of gross merchandise value (GMV).
Commerce to the People
At the end of 2020, despite the ravages of the COVID-19 pandemic worldwide, Alibaba reported strong free cash flow for investment, revenue growth of 37 percent YOY and adjusted EBITDA that rose 22 percent YOY for the year’s final quarter.
The company’s accomplishments reflect the fact that e-commerce operations are easily accessible to mobile and desktop technology users, even when an unexpected and potentially devastating event such as the global sweep of the pandemic leads to governmental restrictions aimed at preventing people from interacting in person.
China, the first country to report discovery of the novel virus, was also on the leading edge of trying to stop its transmission, drawing on lessons learned from the severe acute respiratory syndrome (SARS) outbreak in 2002.
China was the only major world economy to rise above the pandemic’s ravages enough to record positive growth in 2020. The country, with an estimated population totaling 1.4 billion, reported a gross domestic product of more than 100 trillion yuan (US$15.4 trillion) for the first time, representing about 17 percent of the global economy. E-commerce, including the business operations of Alibaba, played an enormous role in that recovery.
Alibaba posted a remarkable CAGR of 49.8 percent in revenues between 2016 and 2020, as well as a CAGR of 33.1 percent for its operating profits during that period.
Analysts predict that Alibaba will continue to experience significant growth in the coming years. Although Alibaba is mainly an e-commerce company that trades in consumer products, it also has an increasingly wide variety of diverse business units. These include:
- Cloud computing
- Internet services
- Financial services
- News media
The company has invested in more than 10 startups in Hong Kong and, in 2019, launched a cargo flights agreement with Russia’s national postal operator, Russian Post (Pochta), to deliver goods Russians purchase from the e-commerce giant online.