How Alibaba Is Changing Chinese Culture
People are quick to point out that China has a huge credit issue, a large housing bubble and a government that’s cooking its books, according to Tim Seymour.
“On some level, all of those things are correct,” he said, but he was quick to point out that’s not the whole story.
Seymour is the founder of Emerging Money and the emerging markets correspondent for CNBC. He recently joined Benzinga’s #PreMarket Prep to talk about China’s shift to a consumer economy and how Alibaba Group Holding Ltd (NYSE: BABA) is changing its culture.
“What people tend to miss here is that China is engineering a very long process of trying to move from an industrial economy to a consumption economy,” Seymour said.
This transition could be a decades-long process for China’s economy to get to the same level as the United States, Seymour explained, where 80 percent of the GDP is service-related.
He said that China has already shifted its economy to 45 percent consumption, where it was only 35 percent just 15 years ago.
Alibaba is the dominant player that has emerged out of this growing consumer economy, Seymour said.
He said Alibaba is far from a cheap company, but there are a number of drivers that people should be looking at.
“If you look at the Singles Day numbers, the amount of sales that were coming from Taiwan, from Hong Kong, and the region are really extraordinary and part of the reason you should be excited about Alibaba,” he said.
In addition, Seymour explained how Alibaba itself is reshaping Chinese culture. He said that the Chinese want the full experience when purchasing items.
— Tim Seymour (@timseymour) November 11, 2014
“Shopping in China is a much more personalized experience. People take a lot more time,” he said. “Culturally, Alibaba is doing a very good job in trying to convert a group of people that really would almost feel like they’re being short-changed by shopping online.”
Seymour also talked about why Alibaba is a global play and how he expects to keep it in his portfolio for a long time.
Check out his full interview here:
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