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Alibaba – The Right Marketing at the Right Time

By now, the success of Alibaba’s marketing to investors is quite clear, as the company raised $21.8 billion in its IPO. But how did a Chinese company that many people hadn’t even heard of in the U.S. make such a splashy debut in the U.S. markets? In part, by organizing an amazing public relations campaign.


The founder, Jack Ma, appears in the news as very ‘down to earth’ with various stories that lend themselves to making Mr. Ma (a former English teacher) a likable, ‘real’ person.  For example, the original IPO was scheduled for 8/8 and the word ‘ba’ means 8 in Chinese so the company stated it seemed fortuitous that BABA (the stock ticker symbol for Alibaba on the NYSE) would have its IPO on 8/8. Even though the Alibaba IPO was delayed to a different date, the engaging stories continued.

Another popular story that circulated in the news was how Alibaba got its name.  Mr. Ma chose the name while in a San Francisco coffee shop. He asked a waitress what she knew about the story of Ali Baba. She replied “Open Sesame” and he decided at that moment that Alibaba was the right name. Then he asked people on the street, of various nationalities, the same question and they all had the same answer. It was an easy name to spell and had a global appeal. In the story Ali Baba and the Forty Thieves, the phrase "open sesame" reveals an enormous treasure hidden within.

This story might appeal to people on various levels, but the one that sticks out the most is that Jack Ma was an average person in a coffee shop who sought outside opinion from perfect strangers of various nationalities. The bottom line is that investors are just people, and at the end of the day everyone loves a good story.

With Alibaba’s strong showing of profits in a market that is open for expansion, the IPO was bound to be successful. But the combination of an excellent public relations and marketing campaigns seems to have made it wildly successful.

Marc Fogarty, Audit Partner and a member of EisnerAmper's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.

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