Alibaba open to cooperating with PayPal
HONG KONG -- Alibaba Group Holding is open to working with PayPal to expand payment options after shoppers bought a record amount of merchandise during the Chinese company's annual Singles' Day promotion on Tuesday.
The company is already talking with Apple about payments and may collaborate with eBay's PayPal in the future, Vice Chairman Joseph Tsai said in an interview Tuesday. Alibaba sold more than 45.7 billion yuan ($7.5 billion) of goods within 19 hours of the promotion kicking off, eclipsing last year's record.
Less than two months after completing the biggest initial public offering ever, China's largest e-commerce operator is setting its sights on global expansion as it seeks to attract international merchants and consumers for its platforms. Its financial affiliate is the biggest payments processor in China and also has 17.9 million active users overseas in more than 100 countries.
"If you look at our footprint of being the largest online payment company in China, and PayPal's position of having a very good international position, not just in the U.S. but also in some other countries, these are some complementary footprints," Tsai said Tuesday in Hangzhou, China.
EBay is splitting off PayPal to create two independent companies in 2015. The split may value PayPal at $47 billion, applying a multiple of 1.8 times trailing 12-month revenue -- similar to Amazon.com's -- to eBay's marketplaces and advertising businesses, Bloomberg Intelligence analysts Praveen Menon and Paul Sweeney said last month.
Alibaba's financial affiliate Zhejiang Ant Small & Micro Financial Services is the owner of Alipay and controlled by founder Jack Ma.
Merchandise sold Tuesday by Alibaba's platforms is more than the $5.29 billion of U.S. online sales from Thanksgiving through Cyber Monday in 2013, the company said. The company using 27,000 labels to attract shoppers, including Calvin Klein, Costco Wholesale and American Eagle Outfitters.
Singles' Day, a Chinese twist on Valentine's Day, was invented by students in the 1990s, according to the Communist Party-owned People's Daily. When written numerically, the date is reminiscent of "bare branches," the Chinese expression for the unmarried.
Alibaba's Tmall began marketing Nov. 11 as its biggest sales event in 2009, rivals jumped on board, and the day turned from an opportunity to seek out a partner -- or celebrate singledom -- into an online shopping bonanza.
"November 11 is a key milestone for Alibaba," said Allen Xu, managing director of consultant OgilvyOne Shanghai. "The company used the festival to build its dominance as an e- commerce player linking businesses to consumers in China. With the IPO of Alibaba, the company has the ambition to make this brand go global."
Xiaomi Corp., China's biggest smartphone vendor, sold 720,000 Mi phones worth 1 billion yuan in 12 hours, Vice President Hugo Barra said in a Twitter post Tuesday.
Shopping from mobile devices will be 45 percent to 50 percent this year, Steve Wang, Alibaba's Tmall President, said at a press conference in Hangzhou Tuesday.
Alibaba raised a record $25 billion in September's IPO after it increased the amount of stock it was selling and the price of shares.
Since its Sept. 19 debut, the stock has surged 75 percent in New York, and the company has posted quarterly earnings that beat analysts' estimates.
To raise its profile, Alibaba is marketing in Singapore, Malaysia and Hong Kong through online advertising, videos and social media, including Facebook Inc.
While Alibaba has been building its U.S. operations and chose New York for its IPO, the company struggles for recognition in the world's largest economy.
Among 3,500 U.S. online shoppers surveyed, 63 percent said they were unfamiliar with Alibaba, according to Los Angeles- based marketing consultant Connexity.
Apple in September announced Apple Pay, a way for people to use an iPhone to pay for goods in stores. Mobile payments in the U.S. are projected to total $118 billion by 2018, up from $3.5 billion this year, according to EMarketer.
Ma and Apple Chief Executive Officer Tim Cook last month said they are open to working together on projects that would turn phones into tools for buying and selling goods.
"Their team is talking to our team," Tsai said Tuesday. "We would be interested in working with them to power that payment function."