Alibaba Group Holding Ltd (NYSE:BABA) did rival a lot of American online retailers and technology companies with its record initial public offering and continuous stream of products to outmatch its US peers. Now, the former employees of the Chinese online retailer are taking the fight to the Silicon Valley startups by starting businesses in China’s Hangzhou.
The record public offering of Alibaba made many of its employees’ millionaires and this generation of employees is all set to invest in their own startups. Another interesting fact is the $30.3 billion raised by IPOs of Chinese technology companies in 2014 against $4.97 billion raised by their American peers.
Hangzhou is the new technology core of China with increasing online startups and according to Wang Huadong, Matrix Partners China,
“Today in Hangzhou, you could be having dinner at a night market and you’ll hear people around you talking about their startups. You’re seeing a wave of people trying to set up their own businesses, trying to find the next big opportunity.”
Another major advantage enjoyed by these Chinese startups is the large internet user base in China, which is ready to try new services. According to Jenny Lee, GGV Capital in Shanghai, most of these startups focus around e-commerce, internet finance, and location-specific services, areas where Alibaba Group Holding Ltd (NYSE:BABA) excels against its peers.
China is the second-largest country in terms of receiving venture investments after US and the country received venture investments worth $8.1 billion during the first three quarter of 2014, trailing behind US only, which received $37.3 billion in capital investments.
Earlier this week, Jack Ma, CEO and Founder of Alibaba Group Holding Ltd (NYSE:BABA), expressed his interest in a partnership with Sony Corp (TYO:6758) for increasing its footprint in the entertainment industry. The company is working on its base to compete against its primary rival, Tencent Holdings Ltd (HKG:0700), in the industry.
This article has been written by Prakash Pandey.