Look Out Amazon: Here Comes China’s Alibaba

After IPO, e-commerce giant plans U.S., Europe marketing push

One of the most closely watched IPOs in recent memory debuts on the New York Stock Exchange this Friday as the Chinese e-commerce giant Alibaba goes public.

Jack Ma, the company’s founder and chairman, has been making the rounds in the U.S. this past week to drum up investor enthusiasm about the stock offering, which will start trading at around $68 a share, reports Reuters. The IPO is expected to raise at least $22 billion to $25 billion, making it one of the highest-valued IPOs in NYSE history, according to The Wall Street Journal.

The Alibaba offering signals a shift in competition for highly-capitalized internet companies. When Alibaba debuts, four of the top 10 internet companies in the world—calculated by stock-market valuation—will be Asian, with a combined value of $426 billion, reports the Journal. (The other three Asian companies are Tencent Holdings Ltd., Baidu Inc. and JD.com, according to the Journal.) By contrast, Google, Facebook,  Amazon and eBay weigh in with a combined market value of $797 billion.

Ma has promised that his company, based in the eastern city of Hangzhou, will use the IPO funds to launch and market versions of the site in the U.S. and Europe. In June, it launched a U.S. beta version called 11 Main, which is open for business.

The site operates on an "invitation only" basis for shops and consumers. Customers need to sign up to receive an email invitation, and retailers have to register. The exclusive strategy belies the company’s appeal, which is courting smaller retailers who carry a spectrum of brands with bargain and luxury prices.

The U.S. manager of 11 Main, Mike Effie, told Women’s Wear Daily the site is focusing on attracting boutique and independent brands. He added that the company is building an eclectic Main Street shopping experience, where consumers vistually wander around “a luxury shop sitting near a vintage shop [that’s] near a collectibles shop.” 

An example of an 11 Main shop is Northern California fashion retailer Alys Grace, which carries Joie, Diane von Furstenberg, and Vince. In all, 11 Main will feature 500,000 products to choose from in categories that include jewelry, tech, sporting goods, toys and entertainment.

Alibaba is battling concerns about vendors that sell gray-market goods. To that end, it's been cleaning house on its Chinese sites to attract high-quality brands that are reluctant to join a marketplace of 70,000 vendors, many of them with knock-offs. The company reportedly dumped 50 vendors who were not authorized to sell Burberry, hoping to encourage the British luxury fashion house to join. 

And the name of the company? It's based on the 18th century Arabian Nights’ tale Ali Baba and the Forty Thieves, in which a poor woodcutter enters a thieves' den of treasures with the phrase, “Open, sesame.” Maybe that isn’t so farfetched. Ma and Wall Street investors are betting that American shoppers open their wallets to Ma's online empire.