Alibaba Tracker: Going Global

It’s been awhile since our last edition of Alibaba tracker, and a great deal has happened since then. There’s a lot to get through, so hold on to your proverbial hats!

First up: no showers, just flowers for Alibaba (BABA) shares in April. The company continues its steady year-to-date progress into spring. Since the ball dropped, BABA has seen net gains of 27.24 percent. On Tuesday of this week, BABA shares hit $112 even, marking the first time since September of last year BABA was this valuable.

At the time of writing, BABA was worth $111.03, down 0.15 percent from Tuesday’s close.

While there’s still a bit more growth to go before breaking through all-time highs seen in November 2014, some analysts’ sentiments peg Alibaba’s shares at well past that threshold in twelve months’ time.

Earnings per share are another story, however. Analysts predict that Alibaba will likely see additional loss through at least the next fiscal quarter—though long-term projections out past 2020 bode well for future growth. Everything will become clearer upon Alibaba’s Q4 earnings report slated for the beginning of May.

Moving on to current events, as of April 16, Ant and MoneyGram entered into an amended merger agreement that has been unanimously approved by the MoneyGram board of directors, and the transaction is now subject to approval of MoneyGram stockholders and other customary closing conditions.

The acquisition of MoneyGram is an important part of Ant Financial’s international expansion plans as it gears up for an initial public offering.

Ant Financial was valued at around $60 billion in 2016, though its exact value after an additional $3 billion funding round has yet to be made public. The merger with MoneyGram provides the Alipay operator with a global payments and remittance network.

Ant Financial still has to clear the Committee on Foreign Investment (CFIUS), which looks at acquisitions for national security risks—a topic of concern since Ant Financial first announced its acquisition plans back in January.

Meanwhile, Alipay recently broke into Italy via a deal with Italian financial services company UniCredit.

UniCredit merchants’ PoS systems can now register QR codes generated by Alipay, meaning that the payment platform’s over 450 million active users, largely Chinese nationals, will be able to make mobile payments for goods and services in Italy.

Alibaba has also made additional headway into a major emerging global market.

Last month, news broke that Alibaba would be bringing its Taobao online marketplace to Singapore, a strategic point of entry to the broader Southeast Asian market.

Alibaba and Lazada launched a website for Singapore that links directly to Alibaba’s shopping platform. The site adds some 400,000 new Taobao products to Lazada’s site and leverages Lazada’s logistics network to cover delivery in Singapore.

Frugal shoppers in Singapore had already been buying off of Taobao, said Bloomberg, though the site was not optimized for it.

The new integration with Lazada translates the Taobao marketplace from Mandarin into English, for instance. It’s a key feature for the sovereign city-state of over 5 million whose official languages include Malay, English, Tamil and Mandarin.

Bringing Taobao to Singapore is the first major move since Alibaba’s $1 billion purchase of controlling stake in Lazada last year.

Alibaba has striven to build a greater international footprint to balance out losses from a slowing domestic market. Southeast Asia is predicted to be the next global region to see an eCommerce boom. The region’s internet economy is projected to become a $278 billion market by 2025.

The move also puts Alibaba in a strong offensive position against Amazon, whose entry into Southeast Asia was delayed earlier this year.

Ant Financial also recently made a play in Indonesia, Southeast Asia’s largest economy, by partnering with the nation's second largest media firm Emtek.

Last year, Emtek made a licensing deal with BlackBerry to gain control of BBM’s Indonesia operations. BBM is a major messaging service in Indonesia, seeing over 63 million monthly active users. Under the deal with Ant Financial, the two will create a mobile payment service within BBM.

On a broader level, smartphone adoption in Indonesia is expected to increase from 67.1 million to 92.1 million by 2020, according to projections from eMarketer. This move into Indonesia could place Alibaba and Ant Financial in a stronger position to compete for mobile payment dominance in the region, especially against Tencent’s WeChat Pay.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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