For all the accolades for U.S.-based internet-technology giants like Amazon.com and Facebook, the real king of the digital hill lies thousands of miles to the east in China -- the home of Alibaba.
There's really no doubting that sentiment. Alibaba is the largest e-commerce company on earth, with its three primary e-commerce sites -- Taobao, Tmall and Alibaba.com -- engaging tens of millions of online users daily.
No doubt about it, Alibaba is a huge e-commerce success story that continues to grow. How did the company take wing and soar to historically record-breaking commercial heights?
It's a story worth telling, and it's a story primarily written by a visionary founder who saw a marketing opening in Internet-based e-commerce and took full advantage.
Alibaba: A History
Technically, Alibaba (BABA) - Get Alibaba Group Holding Ltd. Report was founded in December, 1999 by Jack Ma, former school teacher, who spearheaded a group of 18 tech pioneers whose initial goal was to leverage the power of the wholesale internet marketplace.
The founders hammered out Ma's real-world vision of a China-based e-commerce company that could deliver to the country's 730 million internet users on an efficient and timely basis.
But Ma had laid out his own vision for the company first. Born Sept. 10, 1964 in Hangzhou, Ma's initial career goal was to become an English teacher, as the demand for learning the English language was just taking off among capitalistic-minded Chinese consumers.
While Ma eventually did land a teaching job, it didn't last long. He transitioned to a career in business and, after being turned down for a job as a manager at Kentucky Fried Chicken in China, he traveled to the U.S. with the intent on enrolling in his dream school -- Harvard University.
Ma's quest for an Ivy League degree was derailed after he began using the internet and soon noticed a decided absence of Chinese companies engaging in the burgeoning e-commerce marketplace.
Soon, he started a web site that focused on China commerce and was soon approached by Chinese investors who shared Ma's vision for a Far East-based e-commerce company. He opened another company called China Pages, and revenues picked up immediately; within three years, China Pages was valued at $1 million.
With China Pages, Jack Ma had the broad contours of a major, China-based business-to-business online e-commerce site and took the idea to various investors and partners. With $35 million in venture funding in his back pocket, he and his partners rolled out Alibaba in late 1999, just before the old century rang out and a new one rang in.
Shifting Into Higher Gear
Alibaba had opened for business at an opportune time.
By the start of the 21st century, the idea of shopping online for goods and services had genuine appeal to consumers. There was no need to get into the car or onto a bus to hit a mall and find the exact item you were looking for at a discount price.
Already, emerging web sites like Amazon (AMZN) - Get Amazon.com, Inc. Report and eBay (EBAY) - Get eBay Inc. Report and Netscape, which launched its Netscape Navigator web browser, were making it easy and efficient for shoppers to spend their retail dollars.
Commerce-starved China, with hundreds of millions of consumers with money to spend, was the perfect landing spot for Alibaba. Chinese consumers, flush with cash from good jobs that came with the country's transition from communism to capitalism, were immune to the dot-com bubble crash that wiped out billions in capital and took years to recover from.
With additional venture funding rolling in, Alibaba soon rolled out new sites like Taobao.com, an eBay-like consumer-to-consumer online retail market place and Aliwangwang, an instant-messaging tool that made it easier for consumers to research and shop for good deals online. A third-party payment platform called Alipay soon followed, giving Alibaba all the business tools it needed to dominate the Asian e-commerce marketplace.
As the first decade of the new century progressed, Alibaba found a business partner from an unlikely but welcome source -- the Chinese government.
Suspicious of foreign business invaders, the Chinese government embarked on a campaign of strict internet control within the country, effectively locking out U.S. e-commerce giants like Amazon out of the Chinese market -- and leaving that market wide open for Alibaba to prosper.
It wasn't until 2005, when China gave the green light to a partnership between U.S. technology giant Yahoo.com and Alibaba (the latter wound up running the former's China business in due time). By that time, Alibaba was firmly entrenched as the leader in the Asian e-commerce market, and U.S. and European like-minded companies have been playing catch-up ever since.
By 2014, the future was set for Alibaba on a worldwide basis, as its $25 billion initial public offering took Wall Street by storm, and flush with billions in investment cash, Alibaba reigns supreme as China's premier e-commerce company and, along with Walmart (WMT) - Get Walmart Inc. Report and Amazon, one of the largest e-commerce companies in the world.
Here are the key dates in Alibaba history.
1999: The company was founded by Jack Ma and 18 partners in Hangzhou, China.
2000: The company raises $25 million in funding from Goldman Sachs, (GS) - Get Goldman Sachs Group, Inc. Report Softbank (SFTBY) and Fidelity Investments, among others.
2002: Alibaba turns its first-ever profit.
2003-04:Alibaba rolls out Taobao, its consumer e-commerce site, and launches Alipay, its online payment system.
2007: Alibaba is listed on the Hong Kong stock exchange.
2009: On its 10th anniversary, Alibaba introduces its new cloud computing platform.
2010: Ray-Ban and Gap (GPS) - Get Gap, Inc. Report open online stores on Alibaba's Taobao Mall, opening a new path to profit for U.S. businesses doing business in China.
2013: Jack Ma steps down as CEO of Alibaba. He is succeeded by Jonathan Lu, Ma's hand-picked successor.
2014: Alibaba grows to become the largest online commerce platform for small businesses. The same year the company goes public, with a $25 billion IPO and a new trading price of $68 per-share -- besting big technology stalwarts like Facebook (FB) - Get Meta Platforms Inc. Class A Report and Google (GOOGL) - Get Alphabet Inc. Class A Report .
2016: Scandal and controversy shroud Alibaba, as the company is tied directly to the sale of illegal, fraudulent products. The U.S. government fuels the fire by labeling Taobao as a counterfeit e-commerce platform.
2018: Alibaba rebounds from scandal as Taobao crests 580 million active monthly users and Tmall hits 500 monthly users. The same year, Jack Ma announces that he will step down as chairman of Alibaba in 2019.
2019 and Alibaba's Stock Price
By 2019, Jack Ma makes good on his pledge to walk away from Alibaba. He does so in September 2019 and is succeeded by Daniel Zhang, now the current chief executive officer at Alibaba.
By June 2019, Alibaba was smashing new e-commerce records. Its mobile user base had grown to 1.1 billion while revenues had grown by 42%. The site now boasts 674 million active monthly users and represents (as of year-end 2018) 60% of the entire Chinese e-commerce market.
Its employee base had grown to 86,000 staffers worldwide and the company was delivering 57 million packages a year via its Cainiao Network.
The company's stock price is experiencing robust growth as a result. It's currently trading at $176 with a sturdy market cap of $458 billion.
Wall Street analysts expect share price growth to continue, with an average analyst consensus calling for BABA stock to rise to $222 per-share within a year's time.
Even though Jack Ma is no longer calling the shots, Alibaba continues to thrive as one of the world's largest online commerce marketplaces, and should do so for years to come.
That more than fulfills the founder's vision of an e-commerce platform for the Chinese populace -- and make no mistake, Alibaba has achieved that goal and then some in just 20 years in business.