Observers speculate over 'open sesame' strategy

Alibaba refocuses its growth, looking at finance and other platforms, while considering potential IPO

While managers at Alibaba, the country's largest e-commerce retailer, mull over a potential listing, the wider industry is speculating what the prolific empire will finally encompass.

According to market watchers, Alibaba has embarked on a steady course to become a comprehensive, service-oriented company by upgrading its existing businesses and expanding product portfolios on other fronts.

Alibaba.com, the company's namesake business-to-business unit, is refocusing its growth amid tepid trade figures through big data backed platforms.

Alibaba will leverage data it collects from overseas buyers to precisely locate relevant Chinese suppliers, a move that will enhance transaction efficiency by 28 percent, said Wu Minzhi, president of the company's international business.

"Today we see a changing export environment in which producing bulky orders is no longer a common practice like it was 10 years ago. Instead smaller-cap foreign buyers are seeking diversified products and want to find the appropriate suppliers in China as soon as possible," she said.

That would require Alibaba to move beyond playing a mere intermediary role by connecting the demand and supply side via the so-called "direct procurement platform" by sharing key commercial information such as emerging business trends.

The fact that Jonathan Lu, who also serves as the company's chief data officer, took the helm of the company after founder Jack Ma resigned, indicated the growing importance of data for the company, said Qiu Lin, an IT analyst with Guosen Securities Co in Hong Kong.

Meanwhile, Alibaba's most popular online trading units, Taobao and Tmall, easily exceeded the combined sales of its foreign counterpart Amazon.com Inc and eBay Inc last year, aiding the Alibaba empire to secure a solid footing in hot e-commerce competition.

The breathtaking development has started an Alibaba frenzy within the capital market, which is desperately pursuing profitable investment bids in the current turbulent economic conditions. Some even said the company could fetch a valuation as high as $100 billion.

Alibaba is pushing beyond its core businesses to ones dominated by large State-run operations such as banking or nascent service industries that are largely fragmented.

After making loans for several years, Alibaba recently tapped investors to finance a small-business lending effort that would use its electronic platform in a new move the company has crept toward as it slowly expands its financial territory.

The firm, awash with cash, was under the spotlight last month when it started to offer users of its online payment platform the option of depositing money, in the same way a bank operates but with the promise of better returns.