Alibaba Group Holding Ltd (BABA) IPO Might Affect Amazon.com, Inc. (AMZN)’s Business

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Alibaba Group Holding Ltd (NYSE:BABA) is all set to hit the road in US market with their public offering in few days. Hours before their final opportunity to pitch in to the investors in their roadshow in London, Forward3D CEO, Martin McNulty talked on Bloomberg about Alibaba IPO and its impact on Amazon.com, Inc. (NASDAQ:AMZN).

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McNulty thinks that the Alibaba Group Holding Ltd (NYSE:BABA) IPO is incredibly significant. He mentioned that the eastern business of this huge magnitude has never locked on into the western business and this public offering might be the first such event. He feels that the IPO might not be good for Amazon.com, Inc. (NASDAQ:AMZN)’s business in US.

“I think this means a whole lot of sleepless nights for Amazon. […] You have got a business which has done extremely well competing on utility. Great website, colossal range but also that could be pretty aggressively on price and you could see that in the profits of Amazon. I think a $120 million loss in the last quarter. Compare that to an Alibaba, which is about to stample over its turf.  Alibaba make $2 billion in the last quarter,” McNulty said about Amazon.

McNulty added that the Alibaba Group Holding Ltd (NYSE:BABA) has the potential to undermine the prime e-commerce business of Amazon.com, Inc. (NASDAQ:AMZN). He thinks that Alibaba can take the market share from Amazon with their extremely competitive pricing.

Many people in US are still comfortable in buying US products as opposed to Chinese products. McNulty thinks that the timing is right for Alibaba Group Holding Ltd (NYSE:BABA) to launch their business in US. He feels that if this was done 5 years ago, it would have been a flop. McNulty added that people in US have developed confidence over the Chinese products and Alibaba could use that confidence to sell their products in US.

McNulty thinks that Alibaba could do a lot of interesting things in pricing their products and might give a stiff fight to Amazon in US. He feels that Alibaba could sell the cool product line from Amazon with aggressive discount to attract consumers.

Alibaba IPO could connect the western market to extremely small and unknown domestic manufacturers in China. McNulty thinks that Alibaba could increase the competition in e-commerce, which was never expected to have such competition.

Among the shareholders of Amazon.com, Inc. (NASDAQ:AMZN) is Fisher Asset Management, led by Ken Fisher. As of 30 June, 2014, they hold around 2.5 million company shares.

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