China’s Stock Rout Forces Alibaba Group Holding Ltd (NYSE:BABA) To Pursue International Expansion


Dallas, Texas 07/09/2015 (Financialstrend) – The need to expand globally is becoming increasingly necessary for Alibaba Group Holding Ltd (NYSE:BABA) as China’s stock market continues to plunge as traders move to cut ties with the country. The Chinese marketplace has always been the key to the e-commerce giant’s operations, but sentiments are slowly changing as it becomes its biggest vulnerability.

Expanding Internationally 

The effects of the Chinese downturn has seen Alibaba Group Holding Ltd (NYSE:BABA) stock clock new lows in the market since going public with fortunes not expected to change anytime soon. Executive chairman, Jack Ma, has publicly admitted that the only way out of the current mess is expanding internationally.

Some of the suggested plans involve expanding warehousing investments abroad. The move should be a point of concern for, Inc. (NASDAQ:AMZN), which could see its market share come under pressure in some markets. However, Ma needs to succeed first in China if he is to have a shot at taking over the e-commerce business on the international front.

Concerns over Economic Reforms

Alibaba Group Holding Ltd (NYSE:BABA) fortunes in China depend on the economic reforms that President Xi Jinping plans to initiate as he tries to prevent further turmoil in the economy.  Xi needs more than ever to diversify China’s growth engines if a friendly operating environment is to be created, instead of just opening up credit floodgates.

Alibaba Group Holding Ltd (NYSE:BABA) has already announced plans to invest $100 million in a ‘flash sales’ platform that deals in fashion goods. The investment is part of a strategic plan to invest far and wide as China’s marketplace falls into uncertainty. The e-commerce giant has also invested $206 million into Singapore Post Limited.

Investing abroad should help burnish Alibaba Group Holding Ltd (NYSE:BABA)’s reputation with foreign brands something that has always been a point of concern for investors. Ma has from time to time reiterated the need to expand the company’s operations to the US market and beyond. Seen as the only way Alibaba can grow from the current levels

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