Name: How Alibaba Makes Billions
Uploaded: 2025-11-20T18:03:49.000Z
Duration: 9 min 39 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

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Chinese tech giant Alibaba makes history with the largest IPO the world had ever seen, raising a staggering $25 billion on its first day of trading.

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Getting some clarity on Alibaba's highly anticipated IPO initial public offering.

The tech industry's largest IPO since Twitter.

It is, of course, a historic day here on Wall Street.

Alibaba came into the New York Stock Exchange with this very large ipo, and

it started becoming seen as a tech player.

It was an affirmation that so much of what the team and Jack had done in the prior years was being recognized as a value to the global community.

More than a decade later, Alibaba's IPO remains the tech industry's largest.

Its revenue has soared and its influence has grown.

But the journey hasn't been without setbacks.

A sweeping regulatory crackdown, a slowing Chinese economy and intensifying competition.

And yet, in its 2025 fisc fiscal year, Alibaba earned nearly a trillion renminbi, or $137 billion.

I've covered tech for over a decade, with three of those years in China, reporting on the country's most fascinating giants.

over the course of this episode, I'll take you on a journey into what the company does and and how it operates.

Alibaba has always been a bit of a hybrid of American companies.

You can say it's sort of a mixture of Amazon, PayPal, Google, Uber, maybe even Netflix, because they constitute many different aspects of the digital economy.

Established in 1999 in a small Hangzhou apartment by Jack Ma and his co founders, Alibaba has evolved From a humble B2B online marketplace to a sprawling empire of more than 25 businesses spanning across e commerce, cloud computing, logistics, entertainment, and

It was a B2B E commerce company, so it was trying to get people to trade online and pay online.

China at that time had less than 10 million Internet users.

And really what they had to do is build this from ground up.

If we don't go to the C2C marketplace someday with ebay's power resources, they come to China, they'll kill us.

Alibaba launched its own consumer platform in May 2003.

They named it Taobao, which translates to treasure hunting in Chinese.

Taobao became wildly successful, achieving market dominance in China in just two years.

Over time, Taobao grew and grew and basically businesses started approaching Alibaba, Nike or whoever saying can we sell from our own stores?

And they created what was initially called Taobao Mall, which became tmall and that became basically larger businesses selling to consumers.

Today, Taobao and tmall form the core of Alibaba's China E Commerce Group, the company's largest revenue driver, accounting 56point billion 6.6percent of total revenue in the June 2025 quarter.

At the heart of the unit's revenue and profit is something called Customer Management Revenue or cmr.

This includes services like marketing, sales commissions and software subscriptions.

And it's an area that continues to grow for Alibaba.

A key contributor to that growth is a new 0.6% software service fee which replaced a fixed annual fee for merchants.

The movebetter aligns the firm with its rivals and is designed to work on two fronts.

One by generating more revenue from high volume sellers and two, by lowering the barrier to entry for smaller vendors.

You might think an e commerce giant like Alibaba makes most of its money from shoppers, but

in reality it's the merchants who drive the bottom line.

Yet Alibaba's e commerce footprint extends well beyond China.

Its international portfolio include Alibaba.com, for B2B, AliExpress for general shoppers, plus Trendio in Turkey and Deraz and Lazada in Southeast Asia.

Together they brought in about 14% of Alibaba Group revenue in its June 2025 quarter.

If you look at APAC outside of China across Asia, Alibaba really is a big player because they drive an ecosystem of e commerce and logistics and it sits on top of that.

One of the big ways Alibaba drives sales is by creating special events that get people exc excited to shop.

Originally coined as an anti Valentine's Day, Alibaba turned it into the biggest shopping event in the world.

I've been to multiple singles day events in China and it is a spectacle.

Alibaba holds an annual gala where they often get international celebrities to appear and at their headquarters they used to have a live counter of the billions of renminbi being transacted across its platforms.

Alibaba is more than just E commerce running an eclectic range of businesses ranging from Chanyao Logistics Network to The so called YouTube of China Youku, another big portion of Alibaba's business is Alibaba Cloud, or Aliyun.

Aliyun is China's largest cloud services provider, holding more than a third of market share at the end of 2024 globally.

It's a much smaller player, however, holding just 4% of market share, trailing behind us Azure and Google Cloud.

Clearly, China wants to be a leader in the space of AI, and

Alibaba has been announced to be a national champion of AI already in 2018.

And the vision of Alibaba, the vision of China for AI, is, I think, very, very much aligned.

As you've probably gathered by now, the Alibaba footprint is massive across China and increasingly the world.

But that kind of dominance can come at a cost.

In December 2020, Chinese authorities launched an antitrust investigation into Alibaba.

And in April 2021, it was hit with a record $2.8 billion fine for monopolistic practices.

When it went public in 2014, Alibaba was valued at $231 billion with an IPO price of $68 per share.

In 2020, its stock price peaked at $310 per share and never recovered.

Alibaba was also struggling with its own losses, and competition was intensifying.

Even companies like Pinduoduo and Temu and others TikTok has come at such a rapid speed.

So Alibaba has had to adjust in certain areas, and

for a while they were competing on price, which caused a lot of issues for investors.

It became clear that if Alibaba wanted to remain one of tech's leading players, it needed to do something big.

So in 2023, Alibaba announced that it was going to split its business into six different business units.

The new model transformed Alibaba into a holding company, with each business now operating independently, complete with its own board of directors and responsibility for its own strategy and development.

This was done in response to the competitive environment that the company was facing as one large entity.

And so the belief was that if you break out these different businesses as individual entities, they could run free and fast enough without being weighed down by the rest of the businesses.

But the restructure caused too much confusion, and Alibaba simplified it just two years later.

To bring the business back together, the group turned to familiar leadership, co founders Joe Tsai and Eddie Wu, who stepped in as chairman and CEO respectively.

Promoting somebody who is respected within the company was an important move to calm the waters.

After the confusion of the six division strategy, Alibaba doubled down on its core business of e commerce as well as investing in its future revenue streams.

The fact that AI was becoming such a key factor in the success of any business, to keep that linked to the larger organization was a prudent decision, which now we see is paying off.

by heavily investing in cloud and digital, I think we've seen the results of that and it's paid real dividends.

I mean, Alibaba now is seen as a serious player in technology and not just and E commerce company.

When it was founded in 1999, Jack said it needs to last at least 102 years because then it would be in the 20th, 21st and 22nd centuries.

He's tried to basically put the seeds in the company for being a long term player.