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Alibaba's next big moves

Thursday, September 18, 2014 - 02:02

Alibaba's IPO will be one for the history books, and the billions they raise will give them a unique opportunity as they expand around the globe. Bobbi Rebell reports.

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Alibaba's IPO may be the biggest ever- but when the party is over, it will have to get down to the business of selling itself. The vast majority- 88 percent- of Americans haven't even heard of Alibaba, according to an Ipsos poll conducted for Thomson Reuters. Forrester's Zia Daniell Wigder: SOUNDBITE: ZIA DANEILL WIGDER, VICE PRESIDENT AND RESEARCH DIRECTOR, FORRESTER RESEARCH (ENGLISH) SAYING: "I think they need to better understand the U.S. online shopper, the different features that are going to be important to that shopper and how they are different. China has been very price-driven in terms of online shopping today and it's very difficult to compete long term purely on price. So they'll be looking to build out a superior customer experience to win over online shoppers in these mature markets where consumers have extremely high expectations of the ecommerce sites." Alibaba's CEO Jack Ma has said that after the listing, the firm will develop the business in Europe and the U.S.- saying Alibaba is an Internet company that happened to be in China. Wigder says his likely move is to buy his way in: SOUNDBITE: ZIA DANEILL WIGDER, VICE PRESIDENT AND RESEARCH DIRECTOR, FORRESTER RESEARCH (ENGLISH) SAYING: "In order to enter a market like the U.S., it would be very challenging to do it without some sort of major acquisition. You would have to put a huge amount of money toward it. It's very expensive to acquire customers here and create a brand name from scratch." Alibaba has been building a U.S. presence through investments, which include 11 Main.com, its first direct to consumer website, unveiled in June. Its other big U.S. investment is Shoprunner, which rival's Amazon's Prime service, offering two-day delivery from retailers. Columbia Business School's Kinshuk Jerath: SOUNDBITE: KINSHUK JERATH, ASSOCIATE PROFESSOR, COLUMBIA BUSINESS SCHOOL (ENGLISH) SAYING: "Logistics is a very big issue. And that is, I think, where the battle will be, and Alibaba realizes that. I think that is why they are investing in startups like ShopRunner, which are essentially logistics and delivery-based startups." Alibaba will also have address fears about fraud- a concern of U.S. consumers doing business with a Chinese company.

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Alibaba's next big moves

Thursday, September 18, 2014 - 02:02