China Briefing | Alibaba's mega IPO signals rise of China's new wave of tech giants
Monumental IPO underscores sector's vital role in creating jobs and economic growth
As Alibaba, China's e-commerce giant, made its monumental debut with a 38 per cent jump in value on its first day of trading on the New York Stock Exchange on Friday, it is hard not to be awed by the enormous wealth its chairman, Jack Ma Yun, has created for himself, his employees and investors - the focus of intensive media frenzy.
Founded by the former English teacher in his Hangzhou flat 15 years ago, the company raised US$21.8 billion in one of the largest initial public offerings the world has seen, valuing the company at US$231 billion, surpassing Facebook and Amazon and becoming the world's second largest internet company after Google.
Based on Friday's closing price of US$93.89, Ma's remaining stake of 7.8 per cent was worth more than US$18 billion, easily making him the mainland's richest man and among the wealthiest in Asia. As fireworks went off at Alibaba's headquarters in Hangzhou to celebrate the listing, it has also made many of its young employees US dollar millionaires.
But wealth creation is only one of many far-reaching implications of the Alibaba IPO as foreign investors bet on the company as the latest vehicle to tap China's explosive growth of e-commerce and internet use despite the concerns over the firm's management structure and government interference.
The listing has firmly placed Alibaba, which until now was not well known outside China, on the global stage for future expansion in overseas markets, even though Ma said the company would continue to focus on the market at home.
More importantly, it also reflects the rise of a new wave of technology giants to propel the Chinese economy forward as the government seeks greater reliance on innovation and domestic consumption.
Alibaba is the latest e-commerce giant to gain attention abroad following the rise of Lenovo, the world's largest maker of personal computers; Baidu, China's largest search engine company; Huawei Technologies, the world's largest maker of networking equipment; and Tencent, owner of the popular WeChat messaging service.