China's E-Commerce Site Alibaba Could Set Record With IPO

Foreign tech behemoth sold nearly $240 billion in merchandise during 2013.
3:00 | 05/07/14

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Transcript for China's E-Commerce Site Alibaba Could Set Record With IPO
Yeah Wednesday may seventh as the New York markets open today's big number is a whopper 248. Billion dollars. That's how much merchandise was sold on Alibaba in 2013. What's she eBay and Amazon combined. Now the Chinese e-commerce giant is coming to Wall Street. Having filed its papers for an upcoming IPO hello everyone I'm Michelle Franzen in New York. Here with the details Lauren -- from in the Yahoo! finance -- first of all tells what we need to know all about Alibaba how to get -- start. Sure absolutely so this is a company -- many Americans may be until now had never even heard that yet it's -- huge Chinese e-commerce company day. -- and its IPO has been very highly anticipated an agents filed papers last nights and now we know more details so. First thing I do want to disclose that Yahoo! our parent company does and a 22 point 6% state. In that companies are despondent makes -- but that's out there. But switching gears and in talking a little bit about -- Bob one of the reasons why this is such a big deal is because as you mentioned Ali Bob is a monster in the sense at how much commerce goes through its sights 240 billion dollars a third more than Amazon and eBay. Combined so there -- couple main sites in China one is how Bally name essentially is that bazaar where eight million sellers sell merchandise and then the other -- -- -- -- mall and this is where more branded merchandise is sold including western brands like Nike. And apple. So which is my piano it's essentially -- going to be a large play into at this Chinese market where. -- -- controls 80% of the market share 80% transactions went through -- -- sites. Last year. And and China is growing much faster than -- last three times the growth of the US and has fewer people on lines -- there's potentially more upside. For future customers these sites. And any dish and there are other factors pushing people online in China is such is not is much opportunity for -- at retail stores. As some other country's standing there some reasons why. -- -- people are really focused on on this idea. I like your description about it being some sort of -- bizarre online bazaar where you can get everything from they rubber bands to luxury items. What can we expect from the Alley -- IPO. Well what we can expect a lot of chatter so the reports I read is that then offering is expected this summer so what we have in this -- -- It a little more insight into the actual business but -- interned at the IPO we can expect a lot of -- of the numbers a lot of comparisons. This company to other tech companies it is filing in the US even though it is a Chinese e-commerce company decided not to file and Hong Kong's of people will be looking at the region's. Behind that which include some regulatory ones. For instance in the US they could keep their regulatory structure -- keep their structure. Where this senior executives in -- chair man. The chairman Jack mom are able -- And control how many people it puts on the board more than half of the board has control over nominee and that was something that didn't like Hong Kong so corporate governance will be -- that people are looking at people be looking at the pricing it's been a hot IPO market that there had been concerns over. Seventh attack names and momentum stocks in this market so how people respond to the offering will be really interesting and it could be. Huge I mean this could be a twenty billion dollar offering. It's expected to be one of the largest in history and perhaps the largest in the world we'll let's just take a look at the top three Internet IPO's right now to date based books still on top -- are raising sixteen billion. Back in 2012. But you say that -- Bob has the potential to surpass. All of these top tree. Yes so that people be looking for and waiting for in assessing and trying to animal as if that's going to be the case because as -- -- it could raise twenty billion dollars which. Wooden -- FaceBook -- to give you a sense of how its performance compares to face but to get some perspective so. Alibaba -- eight billion dollars in revenue last year that's about what states but did an Alley Bob is growing faster. So people are going be watching and and wanting to it that definitely compare -- Alibaba to other tech companies and in some ways. Its growth is very impressive but it may have a really high price said the violation is expected. To be -- high high end estimates is 250 billion dollars so that would be seventy times last year's profit which is trading much higher ticket to compare that to Google. Google trades at thirty times last year's profits so that's -- and sending look at -- -- expensive the question is what that I -- and that being. And does the growth trajectory justified that kind of price will investors go forward at -- price. And Lauren as it comes to Wall Street does well of the Internet screen near you who will be at the most. At risk here competitive wise with Alibaba coming out of the market. So what -- -- on a competitive landscape so -- -- is coming to the US market in terms of our stock market its listing in New York we don't know where yet but it's expected to be on -- New York Stock Exchange -- Bob that. If the Chinese e-commerce site those so. Her house Chinese e-commerce -- -- its business is in China this is -- play on on the Chinese. Retails scene and other aspects -- it too because they aren't cloud computing and they're also. In online payments with -- -- which -- kind of similar to -- PayPal so does have its hands and work pots. I'm in turn of the competitive landscape though that is something that will be a concern for Alley about it people be watching that as I mentioned. There's a lot is an -- lot of very dominant in a Chinese e-commerce market but there are competitors. Nipping at its heels or they could eat away at some of that market share including. Tencent holdings which -- -- chat which is a large Chinese social media site. And giant and they -- getting into the e-commerce base more so are they -- taking market share what impact could rivals like back. Have on Alibaba in China is certainly something that people will be watching and what could it mean for Amazon and what does -- -- -- need to compete for US eyeballs and money. Well I'm not -- -- -- I mean -- really have customers in the US use its its its ad plays in the Chinese market so I don't think Amazon really need to be concerned. Except that perhaps there will be looking at Alley Bob -- business model and think and hey that looks. Pretty get me the Amazon should be keeping a little -- -- -- more money for how much revenue they're bringing and. But Americans will still be able to order off of that site as it gets more well known here in the US. -- -- -- from Yahoo! finance thank you for joining us. Thank you you of course can keep up with the latest headlines right here on You've been watching the big number on Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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