Massive Value Set to be Unlocked in Alibaba Spinoff

The managers of ANT Group, a subsidiary of Alibaba is in plans to offer 15% of the company in an initial public offering, placing a value of $200 billion on the financial technology business.

With this major shift, a lot of American businesses have already tapped from the riches in technology early enough, we have such companies such as Facebook, Amazon, and Alphabet which have been able to build and expand over time.

These companies have been able to diversify and also acquire a new business which helped them expand and take part in a large market share.

The Ant Group operates Alipay in China, which is the widely known digital payment service in China and has over 900 million customers. Alipay can to an extent be claimed to be the most advanced contactless payments market in the world.

The Chinese market has its unique nature as the major players have been able to set up a new infrastructure outside that which is dominant in other foreign countries, moving away from cash payments to digital wallets.

Alipay which is linked to bank accounts of customers gives customers the freedom and opportunity to purchase goods and pay for services in physical stores as well as when they purchase goods online, by just scanning the QR codes.

With Alipay, cash payment in stores and markets is slowly going away, even as Ant with each transaction made, gets a 0.6% fee.

Apple and Alphabet are also in the process of taking advantage of this initiative, and this they seek to do with Apple Pay and Google Pay.

Cloud computing service providers, Amazon Web Services (AWS), has a share of about one-third of the $96 billion cloud market. The initial idea was to use AWS to support its online store, and so the investment was made in data centers, telecommunications, and software infrastructure so they could accommodate the rising demand from customers.

In 2004, they realized that this same service that they use for their online platform can be sold to other businesses as it concerns processing and storage services.

For 2019, there was a tremendous increase in sales as it had a net sale of $35 billion.

Looking at Facebook, we see also how they moved to acquire both Instagram and WhatsApp. Instagram was acquired for 1$ billion in 2012, and WhatsApp was acquired for $19 million in 2014.

In June 2018, Instagram hit over 1 billion monthly active users and has grown at a rapid over time.

WhatsApp has a record of 1.5 billion monthly active users, with about 1 billion who visit the site daily. Messages sent via the WhatsApp platform are over 65 million.

Facebook has already revealed plans to include certain features to both social networks, as they are working towards providing contactless payment options and also enhancing it to accommodate e-commerce activities.

As other companies seek to adopt a model similar to what is being offered by Ant Group, it gives an idea that it is suitable and offers a major boost to companies.

It is expected that when the shares make it to the Shanghai and Hong Kong stock exchange, it will bring about a lot of positive results. It is also expected that its IPO will be one of the biggest to have happened.