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Going global. From start to worldwide giant, Alibaba get set to | :00:16. | :00:22. | |
list in the US stock market. But can it take on its American rivals? And | :00:23. | :00:28. | |
China's is oil company gets set to sell off $17.5 billion worth of its | :00:29. | :00:35. | |
retail business. `` China's biggest oil company. Thank you for joining | :00:36. | :00:40. | |
us for this edition of Asia Business Report on BBC World News, I am Rico | :00:41. | :00:45. | |
Hizon. Alibaba's public offering is making waves, not just on Wall | :00:46. | :00:49. | |
Street, but on the West Coast of America as well. A chunk of its $500 | :00:50. | :00:54. | |
billion investment over the year has been in Silicon Valley, but as our | :00:55. | :00:57. | |
North American technology correspondent reports, not everyone | :00:58. | :01:02. | |
there is welcoming the CEO with open arms. Ridesharing San Francisco | :01:03. | :01:10. | |
style. His moustachioed mauve eels, the hallmark of this smartphone app | :01:11. | :01:23. | |
`` mobiles. The start`up has been on quite a journey, a key investor in | :01:24. | :01:32. | |
the $200 million funding round earlier this year. That was just the | :01:33. | :01:35. | |
latest in a spending spree. Its venture in mobile spreading way | :01:36. | :01:40. | |
behind transport into areas as diverse as communications, gaming, | :01:41. | :01:44. | |
and app search. So what is driving these investments? This Silicon | :01:45. | :01:48. | |
Valley venture capitalist himself invested in Alibaba a decade ago. | :01:49. | :01:54. | |
Jack is very astute, a operator and investor. I think they are trying to | :01:55. | :01:58. | |
learn as much as they came, understanding that they are Chinese, | :01:59. | :02:02. | |
they are trying to learn as much as they can about the US market. The | :02:03. | :02:05. | |
tech market type economy in general. And obviously many of them have a | :02:06. | :02:07. | |
strategic aspect, which they are trying to bring back into China and | :02:08. | :02:13. | |
using here is a beachhead to expand here in the US. In those potentially | :02:14. | :02:17. | |
expansionist intentions are getting some in Silicon Valley concerned. | :02:18. | :02:22. | |
Right now Alibaba's e`commerce presence is subtle or stop its | :02:23. | :02:26. | |
retail outlet doesn't so much as carry any Alibaba ranting. Some of | :02:27. | :02:31. | |
observers say it e`commerce ambitions could eventually pose a | :02:32. | :02:36. | |
real threat to established companies like eBay. Alibaba does they can't | :02:37. | :02:43. | |
just go into the US and drop. Some of their services they want on the | :02:44. | :02:47. | |
US and expected to work. They will take a long`term approach and try to | :02:48. | :02:51. | |
introduce other services slowly but surely into the US. But they have a | :02:52. | :02:55. | |
ton money and experience and you can never discount Alibaba. But for | :02:56. | :02:59. | |
start`ups needing investment in their quest to become the next big | :03:00. | :03:04. | |
thing, Alibaba's investment is positively welcome. Chinese funding | :03:05. | :03:08. | |
these days is seen as a badge of credibility. It is clear that | :03:09. | :03:12. | |
Alibaba's presence here in Silicon Valley is not a 1`way street. Many | :03:13. | :03:16. | |
established US firms may fear what they see as the encroachment by the | :03:17. | :03:17. | |
Chinese Internet giant on But for many others it is a gateway | :03:18. | :03:29. | |
into China itself. Not just in new market, but the world's guest. | :03:30. | :03:34. | |
Alibaba might be a household name in China, but this is not necessarily | :03:35. | :03:38. | |
the case beyond its borders. In part of the ambition is to raise | :03:39. | :03:42. | |
awareness of the company among consumers in North America and | :03:43. | :03:46. | |
Europe. I spoke to a representative from advertising giant McCann, who | :03:47. | :03:49. | |
shared his insights into what Alibaba needs to do to attract | :03:50. | :03:55. | |
consumers in these markets. It is known for the best transaction. That | :03:56. | :03:59. | |
is what it does. One site has it all. The reality is it will have to | :04:00. | :04:03. | |
make some changes if it wants to build within those two geographic | :04:04. | :04:07. | |
locations. Do you think that Alibaba has what it takes to be able to | :04:08. | :04:15. | |
break into the American market and give American consumers that sense | :04:16. | :04:19. | |
of experience? I would never underestimate the CEO. He has proved | :04:20. | :04:22. | |
to be an incredible businessman and an incredible showband. He knows | :04:23. | :04:27. | |
what it takes to find the consumer `` show man. The question is whether | :04:28. | :04:33. | |
he wants to do that. He seems to believe that the best marketplace is | :04:34. | :04:33. | |
one looking at the results in China, | :04:34. | :04:38. | |
ears right. The question is whether he will have to adapt for the United | :04:39. | :04:42. | |
States. I think in the long`term if you want a significant part of the | :04:43. | :04:45. | |
market you will have to make changes. If he makes that adoption? | :04:46. | :04:51. | |
What if he adapt to what the US consumers want? Can he beat the | :04:52. | :04:57. | |
Amazon and the eBay is? He is not just looking to see whether he can | :04:58. | :05:03. | |
eat those companies, he is in a race against Walmart, against a lot of | :05:04. | :05:04. | |
individually oriented Rands who have good consumer presence right now on | :05:05. | :05:07. | |
the web and to a way for consumers to find their | :05:08. | :05:14. | |
goods. Many consumers still prefer shopping with those companies. He is | :05:15. | :05:21. | |
a marketplace, they are brand specific areas. I think this is a | :05:22. | :05:24. | |
race with which still has a lot to be run. Can Alibaba educate American | :05:25. | :05:28. | |
consumers with a transaction oriented philosophy? Without a doubt | :05:29. | :05:31. | |
he can bring some things which right now are not necessarily the same as | :05:32. | :05:35. | |
in the United States. I'm not sure he can educate them, but he can make | :05:36. | :05:39. | |
some of the things that Alibaba is doing more appealing for an American | :05:40. | :05:42. | |
audience. There is no doubt that he can do that. What he still has to | :05:43. | :05:51. | |
then figure out is whether it is a sensory, wholesome experience. Do I | :05:52. | :05:55. | |
get the experiential satisfaction I get in these other places? Can Asian | :05:56. | :05:56. | |
e`commerce sites succeed in the with their existing business models? | :05:57. | :06:01. | |
No, I think they still need to do more about the security of data, | :06:02. | :06:06. | |
they still have to engender more confident about privacy, they still | :06:07. | :06:09. | |
need to be more knowledgeable about American consumer experience. Those | :06:10. | :06:13. | |
elements which the Asian business sites will have to adapt to. And | :06:14. | :06:18. | |
other business is making headlines, China has | :06:19. | :06:22. | |
showing its weakest growth in industrial output in more than five | :06:23. | :06:27. | |
years. The industrial debt measures output at nine factories and | :06:28. | :06:30. | |
workshops. The numbers released over the weekend also revealed | :06:31. | :06:35. | |
growth in retail sales and weaker than expected investment in | :06:36. | :06:38. | |
infrastructure. Analysts say the new numbers are raising concern over | :06:39. | :06:42. | |
China's current economic strength. The UK`based retailer hones4u is set | :06:43. | :06:50. | |
to fall into administration, putting hundreds of jobs at risk. The chain | :06:51. | :06:56. | |
says 550 stores would all be closed on Monday `` Phones4u. Phones4u | :06:57. | :07:03. | |
blamed its position on the decision not to renew its contract, which | :07:04. | :07:05. | |
came after Vodafone made a similar move. South Korean conglomerates | :07:06. | :07:13. | |
Samsung and LG are in the midst of a strange dispute. Samsung accuses | :07:14. | :07:18. | |
some LG employees of deliberately destroying washing machines in | :07:19. | :07:22. | |
stores in Germany. Samsung says the vandalism took place earlier this | :07:23. | :07:26. | |
month ahead of a major trade fair in Berlin. LG alleges that two machines | :07:27. | :07:32. | |
were damaged, but said it was done accidentally. The case is now being | :07:33. | :07:37. | |
investigated. China's state owned oil giant China Trolley and chemical | :07:38. | :07:45. | |
Corporation is set to sell a whopping $17.5 billion stake in its | :07:46. | :07:49. | |
retail businesses `` China Petroleum. Its retail side includes | :07:50. | :07:57. | |
tens of thousands of fuel stations and convenience stores. The sale | :07:58. | :08:02. | |
comes as china's government looks to restructure and boost productivity | :08:03. | :08:05. | |
in its major state owned companies. For the latest let's cross to Hong | :08:06. | :08:11. | |
Kong. This sale, at $17.5 billion, will be the biggest privatisation | :08:12. | :08:16. | |
since the President came into power. That's right. The biggest since the | :08:17. | :08:24. | |
end of 2012. Now the administration has made it very clear that they | :08:25. | :08:28. | |
want to bring in private capital and private know`how into some of the | :08:29. | :08:32. | |
country's biggest state owned companies, and you don't get much | :08:33. | :08:38. | |
bigger than this. They have more than 30,000 petrol stations around | :08:39. | :08:42. | |
the country, and around 20,000 convenience stores as well, as other | :08:43. | :08:47. | |
assets. They are expanding overseas. If you think about what these | :08:48. | :08:51. | |
private companies are being brought in to do, it does make sense. | :08:52. | :08:54. | |
Interestingly, unlike most other companies, they actually bring in | :08:55. | :09:04. | |
99% of their business. That is just gas and oil. In other parts of the | :09:05. | :09:08. | |
world, things like car washing, going to the convenience store, next | :09:09. | :09:13. | |
to a petrol station, buying food, drinks, perhaps alcohol, it could | :09:14. | :09:19. | |
account for up to 50% of revenue. And that is something that Sinopec | :09:20. | :09:22. | |
is looking at. And I can certainly tell you, when you do those long | :09:23. | :09:26. | |
drives throughout China, you certainly wish these petrol stations | :09:27. | :09:30. | |
would have other services. And which foreign investors would be | :09:31. | :09:35. | |
interested in buying a stake in Sinopec? A whole list of them. This | :09:36. | :09:40. | |
was a huge deal. So it was more than just a few investors. Let me just | :09:41. | :09:43. | |
share with you some of the big names. Really some of the biggest | :09:44. | :09:47. | |
funding management names in China. Harvest Fund, China Life Insurance. | :09:48. | :09:54. | |
10 cents is another Internet giant in China, and they have signed up | :09:55. | :09:59. | |
with Sinopec to work on its digital commerce. And before we go, a quick | :10:00. | :10:07. | |
look at the markets. Asia are currently stumbling to start the new | :10:08. | :10:11. | |
trading week. Most are in negative territory. | :10:12. | :10:12. | |
trading week. Most are in negative Thank you for investing your time | :10:13. | :10:20. | |
with us. I am Rico Hizon. Goodbye for now. The top stories this hour: | :10:21. | :10:26. | |
Britain's Prime Minister David Cameron says the UK will hunt down | :10:27. | :10:27. |