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Here's the Scoop on the Alibaba IPO

Stocks in this article: CTRP BIDU BITA AAPL TCEHY

NEW YORK (TheStreet) -- The moment investors have been waiting for has finally arrived. Alibaba has filed for an IPO.

Alibaba is the largest player in the Chinese e-commerce market and has been growing at an unbelievable rate. The company is often described as a juggernaut combination of (AMZN), eBay (EBAY), Groupon (GRPN), and PayPal all smashed into one company. There have been some fears in recent months of an economic slowdown in China, but the Internet economy in the world's most populous country has been booming.

According to figures from the non-profit China Internet Network Information Center, as of the end of December some 618 million Chinese citizens are now on the Web representing a 45.8% penetration rate. For a quick point of reference this is nearly double the U.S. population of 319 million while their Internet penetration rate is only about half of ours (81% as of 2012) which still leaves plenty of room for expansion. In 2013 the Internet user base in China grew by 9.5% compared to the previous year while the user base in the U.S. grew by only 4% between 2011 and 2012.


The growing population that's spending time on the web in China is also spending an increasing amount of money online. This is evidenced by the growth of companies like vacation booking Web site (CTRP), search engine Baidu (BIDU), automotive marketing Web site BitAuto (BITA), and media and entertainment holding company Tencent (TCEHY).

Last year nearly $248 billion worth of merchandise was sold across Alibaba primarily through its Taobao and Tmall Web sites. Tmall is a platform for larger and more established companies like Apple (AAPL) while Taobao is a massive online bazaar featuring over 8 million vendors. From the nearly quarter trillion dollars of goods sold over Alibaba e-commerce Web sites, the company brought in $5.66 billion dollars in revenue within China alone in the 9 month period that ended Dec. 31. The bulk of this revenue comes from fees, commissions, and marketing services such as display ads. According to the initial prospectus from Alibaba released on Tuesday, Taobao alone receives 100 million visits per day.

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