Alibaba Group Holding Ltd (BABA)’s Growth In U.S Will Be Hampered By Competition

Alibaba Group Holding Ltd (NYSE:BABA) looks set to carry out number of acquisitions, which are expected to spur growth on the international landscape. Bloomberg’s contributing editor, Paul Kedrosky believes that Alibaba will be hyper-active in the acquisition market, looking for entities that will allow it to compete on the same level against other giant online companies.

“I can’t imagine how they won’t be going out and aggressively acquiring, after all that’s what gotten them to where they are today. It hasn’t been an organic growth gross in the core business. They have done incredible number of acquisitions over the last 18 months, “said Mr. Kedrosky

It will be interesting to see how things pan out after the company carries out acquisitions; Alibaba Group Holding Ltd (NYSE:BABA) will opt to shift the technologies back to China where it is based. Bloomberg’s Corry Johnson argues it is still early to speculate whether Alibaba will shift any acquired technologies to Africa where China has huge interests or India where economies of scale could work to the company’s advantage

Alibaba Group Holding Ltd (NYSE:BABA) Chairman Jack Ma has already pointed out that he is open to working with Amazon.com Inc. (NASDAQ:AMZN), However, it would be interesting to see on what front, considering both of them are well established on the online landscape.

Alibaba has enjoyed immense success in China mostly because of its size, which has allowed it to operate as a monopoly especially on online transactions at the back of minimal competition. Johnson believes it will be extremely hard for Amazon.com, Inc.(NASDAQ:AMZN) to replicate latter’s success in the U.S. taking not consideration the immense competition as well as well-established companies that are already competing for market share

“[…] When you look at the numbers international business as a percentage of revenue has gone from well over 20% three years ago to just 9% in the quarter they just reported. […] I think the notion that they are going to be a big player here in the U.S is to look in the wrong place for where Amazon.com, Inc. (NASDAQ:AMZN) is growing and is likely to grow in the near if not far future,” said Mr. Johnson.

Free Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW