Alibaba

Bigger than Amazon

Alibaba is a global giant that grew from modest roots. From origins in founder Jack Ma’s apartment, the Chinese firm expanded rapidly – up from 27 merchants in 2009 – raising a record $25 billion in its initial public offering on the New York Stock Exchange in 2014. Alibaba soon became the world’s second-most-valuable Internet firm, trailing only Google.

Some 400 million people buy goods on Alibaba every year. With its Tmall and Taobao sites, Alibaba is China’s biggest retailer. On November 11, 2015, which amounted to China’s equivalent of Cyber Monday, Alibaba shoppers spent $14 billion.

Alibaba is the fulcrum on which China pivots from an old-school model of factories, exports and buildings into a higher-value economy serving an emerging middle class. Alibaba’s rise reflects China’s transformation into a modern power. And Alibaba has room to grow. Consumer spending accounts for two-thirds of the US economy, but it’s only a third of China’s, so far.

But Not Amazon

Alibaba’s business models differ from Amazon’s. Alibaba holds no inventory; it gives merchants a place to market their wares to consumers. Buyers and sellers pay no...