Skip to navigationSkip to content
CHEAT SHEET

Five key things you need to know about Alibaba

Published Last updated This article is more than 2 years old.

Alibaba has been moving fast, and so has the news surrounding it. Next time you find yourself in a conversation about the company, keep these five points close.

Alibaba has single-handedly made Singles Day the largest shopping day of the year, worldwide. In 2018, the company recorded more than $30 billion in sales within a 24-hour period—twice as much as Black Friday and Cyber Monday in the US, combined, and more sales than McDonald’s made globally in the entire year.

Alibaba’s next step is to become the operating system for global e-commerce. To do that, it wants to capture reams of data, worldwide, about the relationship between customers and vendors. As a result, Alibaba has invested in a wide range of companies—including bike-sharing services, hotels, and automated car washes, to name just a few—that could help it collect that data.

Alibaba’s rival in this contest for data is Chinese messaging company Tencent. The owner of the wildly popular WeChat app (and, perhaps more importantly, the payment system embedded within the app, which competes with Alibaba’s Alipay service) is looking for that same data, and it has backed several companies that compete with Alibaba in different markets (e.g. online retailer JD.com, bike-sharing company Mobile, and food-delivery service Meituan Dianping) to find it.

The next battleground is the cloud. Alibaba’s cloud division is still a small part of its business (it accounts for roughly 7% of overall revenue), but it’s growing at lightning speed—revenues were up 93% year over year at the end of Alibaba’s fiscal 2018, and Alibaba has 50% of the Chinese cloud-computing market. Alibaba CEO Daniel Zhang has said he expects Alibaba’s cloud division to be the “main business” of the company in the years ahead.

The fact that a data-collecting giant is growing in China is raising some eyebrows. Some observers question whether Alibaba’s international growth, particularly in the West, will be stifled because of anxieties related to government involvement and espionage (see: Huawei). As Alibaba moves into things like facial-recognition and other surveillance technologies, it remains to be seen whether these concerns will cause problems abroad.