Thursday 17 September 2009

Alibaba attracting European suppliers

Alibaba.com Ltd, the operator of China’s biggest trading website, is attracting more sellers from Europe and has 1.4 million users in the region after increasing its marketing amid the recession.

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Guanyu said...

Alibaba attracting European suppliers

Bloomberg
15 September 2009

(LONDON) Alibaba.com Ltd, the operator of China’s biggest trading website, is attracting more sellers from Europe and has 1.4 million users in the region after increasing its marketing amid the recession.

Its stock has almost quadrupled in Hong Kong trading this year and now, Yahoo! will be selling its entire stake in Alibaba for as much as HK$1.17 billion (S$215.2 million), according to the terms of the sale obtained by Bloomberg News.

UBS, the sole bookrunner, is placing 57.5 million shares, equivalent to a 1.1 per cent stake, at an indicated price range of HK$19.80 to HK$20.30 apiece, the terms showed. That’s 6.4 per cent to 4 per cent lower than Alibaba’s closing price in Hong Kong yesterday.

The Sunnyvale, California-based owner of the second-biggest US Internet search engine still owns a 40 per cent stake in Alibaba Group Holding Ltd, the parent of Alibaba.com.

Alibaba has been doing brisk business because suppliers from developed countries such as the UK have started seeking markets in Asian countries, especially China, as demand at home eroded amid the worst recession since World War II, Maggie Choo, Alibaba’s director for Europe, the Middle East and Africa, said in an interview in London. The company in April opened its London head office as a gateway for its push into other European markets.

‘Many UK suppliers are using our platform to seek business opportunities in Asia, which is a significant shift,’ Ms. Choo said.

Alibaba spent more than £pounds;1 million (S$2.4 million) on marketing in the UK alone since starting a European ad campaign in August, Ms. Choo said. There has been ‘better value’ in such spending during the recession, she said.

The Hangzhou, east China-based company also benefited from the economic crisis as businesses cut marketing budgets and turned to online promotion instead of going to trade shows, according to Ms. Choo.

Sourcing enquiries directed to Alibaba.com’s UK customers, mostly small- or medium-sized companies, rose ‘sharply’ from a year earlier, Ms. Choo said. ‘This shows a strengthening demand around the world for British goods and services,’ she said.

Agricultural products, home furniture, food and beverages are among the most-purchased British goods, according to Alibaba. The website has more than 450,000 users in the UK.

‘Europe, especially the UK, is a strategic market for us,’ said Ms. Choo. The company’s bright orange animated advertisements now play on media boards in London, including ones at London Bridge and Liverpool Street train stations.