All you need to know about Alibaba and Ant Group
Delhi, Nov 4: Priyanka aunty has explained the concept of IPO in the edition of October 1 , 2019. Let’s do a quick recap here: IPO is the first time that a company allows people like you and me (called the public) to own their shares. You can read all about this jargon on www.mytcp.in
Quiz for you: Which is the biggest ecommerce company in the world? Amazon is the first name that possibly comes to your mind. But that is not the correct answer. The largest company by value of transactions is Alibaba.com, founded by China’s Jack Ma. Alibaba was found in December 1999.
Here is a quick timeline for you:
1999: Alibaba.com, started. It was like eBay or Amazon – online shopping. But also international.
2004: Alipay, a payment service for buyers and sellers on Alibaba.com. This service gave buyers some peace because Alipay kept their money until they got their stuff. After that, the money was given to the sellers. This solved a major trust problem that buyers had with e-shopping.
2011: Alipay was branched out as a separate company. With the mobile interface starting in 2008, the company’s user base had exploded.
2013: Users, given an option to invest the money they kept in their Alibaba balance. This offering was called Yu’E Bao. This, and some other innovations, ensured that Alipay got a lot of the spare change money from many individual users. These users could not invest these small amounts anywhere else, but Yu’E Bao gave them a chance to invest and earn.
2014: Alipay was rebranded as the Ant Group. It provided many financial services to people and businesses in China.
2015: MYbank, launched. This bank could approve loans to small businesses within 4 minutes. This was because the company had a wealth of information on each user. These small businesses could not always get loans from established banks.
2019: Jack Ma stepped down from his role and gave the leadership reins to his selected leaders. Over these years, the Ant group also moved to new business opportunities – selling insurance, sending loan requests to mainstream banks instead of providing the money themselves, etc.
2020: The Ant Group prepared and got approval for an IPO. They wanted to collect about 34.5 billion dollars through this IPO. When the IPO launched, Ant collected about 37 billion dollars of invesment. This makes it the most valuable IPO in recorded history. The company was to list on Shanghai and Hong Kong Stock exchanges.
Jack Ma wanted Ant to viewed as a technology business and not a financial business. On October 23 , at the Bund Summit in Shanghai, Jack Ma made some comments about the shortcomings in the Chinese and international banking systems.
On Monday, the Chinese government published new rules for financial businesses. On the same day, Jack Ma and two of the company’s top officials, called for a meeting. On Tuesday, the Shanghai Stock Exchange said that the company will not be allowed to list on the Shanghai Stock Exchange.
After this, the company said that it is not going to list on the Hong Kong Exchange also, and will, most likely, return the money of the investors. The company has also said that it will work with the regulators to provide whatever additional documentation they need.
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