Alibaba Group Holding Ltd (BABA) Has Enormous Growth Potential: Peter Garnry


Peter Garnry, equity strategist at Saxo Bank, thinks that Alibaba Group Holding Ltd (NYSE:BABA) has a great opportunity in the future and most of its revenue can come from mobile. He was talking in a program on CNBC.


“[…] We are very excited about this. You know, online shopping in China is still a very small proportion of total consumption, so the growth potential is just enormous and we are very very optimistic on the future of Alibaba Group Holding Ltd (NYSE:BABA),” said Garnry.

Answering a question about market share of Alibaba Group Holding Ltd (NYSE:BABA) in China, Garnry said that Alibaba Group Holding Ltd (NYSE:BABA) has 80% share in Chinese e-commerce market and this figure is defendable for a lot of reasons. He thinks that in the coming months, this market share can go to 60%, but there will be no effect of this on Alibaba Group Holding Ltd (NYSE:BABA)’s growth and revenues. Alibaba Group Holding Ltd (NYSE:BABA)’s online presence and penetration is increasing in China. Last quarter, Alibaba recorded 40%-45% of its sales from online purchases. Elevation in online sales depicts that Alibaba Group Holding Ltd (NYSE:BABA) is catching up in the electronic presence domain and this will cover up for the decrease in market share.

Speaking about Yahoo! Inc. (NASDAQ:YHOO), Garnry said that if we look at Yahoo without Alibaba Group Holding Ltd (NYSE:BABA), it is not a stable business and fails to attract the investors. Yahoo generates 600 million fresh cash flow but still, the company is not showing any growth potential or attractive prospects in the market according to Garnry. He said that Yahoo was only attractive because of Alibaba Group Holding Ltd (NYSE:BABA) and now when the Chinese ecommerce giant has started trading in the US, investors should close their positions in Yahoo and move towards Alibaba Group Holding Ltd (NYSE:BABA) because that’s where the growth is going to take place.

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