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5 Moves Alibaba Group Holding Ltd (BABA) Stock Bulls Should Love

James Brumley

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

It would have been easy to overlook, between the political turmoil in Washington, D.C., an emerging nuclear threat from North Korea and the second quarter’s earnings season. But, Chine’s e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) has been a busy beaver of late. Current and would-be owners of BABA stock may want to take note, since most of these deals are significant.

5 Moves Alibaba Group Holding Ltd (BABA) Stock Bulls Should Love

Source: Shutterstock

With that as the backdrop (and as a public service to all investors), here’s a quick run-down of all the deal-making, partnerships and general good news Alibaba has mustered in just the past few days.

In no particular order …

#1: Kering Dismisses Lawsuit

The name Kering isn’t one that turns heads in the fashion world, but it should. It’s the parent company of Gucci. It had been in a tiff with Alibaba for some time now, with the company arguing Alibaba wasn’t doing enough to thwart the sale of counterfeit goods bearing — among others — the Gucci look and logo. Kering even went as far as to file a lawsuit.

That suit, which was sure to be nagging not to mention costly, was recently dropped though, with the two organizations instead choosing to work together in an effort to fight sales of fake luxury goods at Alibaba’s Tmall.

#2: Partnership With Macau SAR Government

Although BABA stock is generally categorized into e-commerce, like the United States’ Amazon.com, Inc. (NASDAQ:AMZN), it does so much more. One of those “other things” the company does is supply the underlying technology to transform a city into a so-called smart city.

Alibaba is going to get a chance to highlight its muscle in that arena soon, in none other than high-profile Macau — China’s gambling enclave. It recently inked a deal with the Government of Macau Special Administrative Region that will allow Alibaba to establish the cloud computing backbone that will improve several aspects of living there.

The real benefit of the relationship is that CEO Jack Ma will be able to point to Macau as case study in what he can do for other cities looking to become “smart.”

#3: New Portal Dedicated to Luxury Brands

Alibaba’s Tmall has always sold higher-end merchandise (real and fake), but only through the same platform used for everything else it touts — it doesn’t have a dedicated brand strictly for more expensive goods aimed at big spenders.

That’s about to change.

Earlier this month, BABA announced it will use artificial intelligence to determine which shoppers are most likely to purchase a luxury good, and show them luxury e-stores other consumers aren’t seeing. Alibaba hopes this new “wall” will provide the much-needed feel of exclusivity that attracts more vendors of higher-priced merchandise.



#4: Marriott Middleman

Here’s another partnership BABA stock owners are going to like: Alibaba is teaming up with hotel chain Marriott International Inc (NASDAQ:MAR), with BABA providing the technical backbone for a website that allows Chinese travelers to book a Marriott hotel — and pay for it using Alibaba’s Alipay — anywhere in the world.

It’s a big deal. Not only is Marriott the world’s biggest hotel chain, Chinese consumers are expected to take 700 million trips between now and 2022.

The real benefit to BABA stock, though, is Alibaba being able to demonstrate itself not just as a place to buy goods, but as a lifestyle company that other service providers should want to tap into.

#5: Unveils Rival to Amazon’s Echo

Last but not least: Amazon’s voice-assistant device called the Echo already has competition in the United States. Now it’s facing competition in China (and soon, elsewhere) in Alibaba’s AliGenie X1.

It’s a pretty close clone of the Echo … except for the fact that it only speaks Mandarin. That is, it can control a smart home, play music, build a shopping list and more. It also gathers tons of data about its user, just like Alexa does vie the Echo. Perhaps most important, though, the AliGenie X1 further positions Alibaba as more than an e-commerce destination.

That is, it helps Alibaba position itself as a lifestyle company, moving further into consumers’ daily routine without them even realizing it’s happening.

One final note: Alibaba reports fiscal first-quarter earnings next Thursday, Aug. 17, before the opening bell.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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