Boston, MA 10/15/2014 (wallstreetpr) – JWT Asia CEO, Tom Doctoroff, said during a CNBC interview that Alibaba Group Holding Ltd (NYSE:BABA)‘s valuation on the New York Stock Exchange points out to unlimited potential in China’s e-commerce space. Doctoroff said that the potential could be evaluated against two reasons. One is the absence of alternatives to brick and mortar businesses in the low-tier city of China, which offers a lot of value. Secondly, e-commerce in China holds a great value and has emerged as a lifestyle to people in the region.
Emotional Bonding
Doctoroff explained that the e-commerce has revolutionized the lives of people in China by offering itself as a retail therapy. He elaborated that in China, people consider social media platforms as a strong medium to connect emotionally. He draws out difference between the Chinese and American counterparts citing that the former place greater importance on attaching emotional element to their digital identity. While, the Americans just do the opposite. Doctoroff boils down to the fact that the Asian brands would, therefore, need to focus on the emotional aspect in order to boost their demand.
UBS Confident
At the same time, UBS has started its coverage on Alibaba Group Holding Ltd (NYSE:BABA). The research firm Analyst, Erica Poon Werkun, set a price target of $100 on the e-commerce giant, with a ‘buy’ rating. Werkun noted in her report that the company is attractively positioned to take leverage from both e-commerce as well as advertising arena.
She also highlighted that the margins of Alibaba Group Holding Ltd (NYSE:BABA) could come under pressure given the lower commission and advertising rates prevalent for mobile devices. But, UBS is positive that the company would succeed in narrowing the monetizing gap that exists between the mobile and desktop devices soon. The coverage from UBS has done little to impact Alibaba Group Holding Ltd (NYSE:BABA) shares that rose marginally by 0.53% yesterday.
