The long awaited IPO from Alibaba was even more successful, and impressive, than industry analysts predicted. It has made everyone wonder what Chinese platform will be next to cross over to a public offering. Many eyes are looking towards Weibo, and there are reasons why that may or may not work. Before you get too far along in your wishful thinking, it’s important to understand why the Alibaba IPO got so big in the first place.
Why did the Alibaba IPO get so big?
Alibaba is more than the Chinese version of Amazon; it is a completely expanded view of direct fulfillment. While you can come onto Alibaba and shop in a manner similar to Amazon for individual orders; you can also order in bulk direct from suppliers and manufacturers in a way that no other platform has made possible. Since most items in the US are manufactured in the East, this all but cuts out the middleman. Alibaba can provide a powerful engine for startups that need product, but typically can’t afford their own private label or find short stock.
Can Weibo be far behind?
The next major Chinese network to watch is Weibo, which is their version of Twitter. Already, major Western companies have moved onto the platform and are creating a presence there – so will it be the next big IPO? There is a lot about Weibo that would make it much harder to bring to a public offering than Alibaba presented. One of the issues is the constant struggle between censors and users that reaches heights that the West is not accustom to seeing. The Weibo “human flesh search engine” is also another issue that could make it be a complicated IPO to get off the ground successfully.
What chance do the competitors have?
What about the other contenders to challenge Amazon and Twitter? Honestly, there are few that can command the language specific audience as a Chinese platform that can rival what already exists in English. These are the two major demographics of Internet users that would make an IPO interesting. Competition from the West would do well to concentrate on the shipping and processing side. Fulfilment is the only area where Alibaba can lag behind when it comes to delivering on the promise of their IPO. A smart startup could step in as a major postal and customs broker with great success.