Alibaba is on a tear. Since the start of 2017, New York-listed shares for China’s largest e-commerce company have jumped almost 90% in value, and the company’s stock got another big bump today (Aug. 17) as it reported profits that nearly doubled the same quarter last year.
The surge not only made founder and CEO Jack Ma about $1 billion richer, according to Forbes’ real-time billionaire tracker, it has also brought Alibaba within a few steps of catching Jeff Bezos’s American-grown e-commerce monster, Amazon, in market value.
So far, 2017 has been good to Alibaba. All its divisions are growing, and it says it is up to 466 million active shoppers (pdf), which is about 140 million more people than the entire US population.
Amazon and Alibaba aren’t exactly direct competitors at the moment. Beside the geographical differences, the companies also operate differently. But they’re still the dominant e-commerce forces in their home countries.
In China, even as economic growth has slowed, sales across Alibaba’s platforms, including Taobao and Tmall—its customer-to-customer marketplace and business-to-customer marketplace, respectively—have flourished. A growing middle class and the spread of the internet through vast rural China are keeping it supplied with a flood of eager shoppers.
Although the company had the biggest IPO in US history in 2014, Alibaba’s shares slumped throughout the following year. Sales still grew, but investors worried about increasing competition from rivals such as JD.com, the company’s well-known problem with counterfeits on its consumer marketplace, and the possibility that Alibaba was stretching itself thin as it expanded into areas such as entertainment. Slowly and steadily, Amazon overtook it in value.
Now Alibaba is closing the gap. After today, Amazon can practically hear its footsteps.