Alibaba: A Retail Force or AliBlahBlah?

By Mark Stone, Asia Correspondent in Beijing

At the northern end of the runways at the world's second busiest airport is a huge warehouse.

Inside, a labyrinth of conveyer belts and an army of workers.

This is the heart of a distribution operation that is as slick as it is mind-boggling.

YTO Express is China's answer to DHL or FedEx but it is growing at a rate its western cousins can only dream about.

"From the beginning the average daily volume was only about 2,000 pieces. Now our average daily volume is 6.5 million pieces," said Li Shaoming, YTO Express's Director of Overseas Business.

Alibaba is set to float on the New York Stock Exchange

YTO Express owes its massive expansion to the success of Alibaba

We watch as a fleet of laden lorries pull up at one side of the warehouse.

Parcels are unloaded onto conveyer belts. Over an hour, a combination of barcodes and manpower shuffles the parcels from conveyer to conveyer.

At the other end of the warehouse, they are loaded onto more lorries and driven away.

In between the functioning conveyers, are more under construction.

The company has seen a growth rate of 50% every year for the past five years and it cannot keep up.

YTO Express can thank one man for its success.

Retailers like Marks & Spencer are 'renting' virtual shop floors on T-Mall

Jack Ma is the most successful businessman you have never heard of - the founder of Alibaba.

Some 80% of all online retail sales in China are via Alibaba's platforms: Taobao, T-Mall and Alipay.

The company has stakes in Sina Weibo (Chinese Twitter) and YouKu.com (Chinese YouTube).

It is Amazon, eBay, PayPal, Twitter and YouTube all rolled into one and it's bigger than all of them.

Across China, small businesses have been linked together and consumers empowered to buy.

Taobao is Alibaba's answer to Amazon.

T-Mall is something new. Think of a virtual shopping centre; a place where the world's brands are available with just one click.

Alibaba founder Jack Ma has built up a personal wealth of £12bn

It is not exactly revolutionary stuff, but no-one else has done it.

Western companies like Marks & Spencer are 'renting' virtual shop floors on T-Mall, opening the door to China's 600 million internet shoppers.

Remember, the individual wealth of Chinese consumers is growing daily.

For foreign investors wary of diving into China with bricks and mortar, T-Mall is a perfect alternative.

Alipay is similar to PayPal, accounting for half of all online payment transactions within China. It provides a verification process and payment system for customers - a secure online 'counter' for customers.

Uniquely, Alipay will only transfer money to sellers once the customer has accepted and is satisfied with the product.

Taobao is Alibaba's answer to Amazon

With China's lack of consumer trust, this has proved particularly attractive.

Essentially, with Alibaba, Jack Ma has made it incredibly easy for China's new, hungry online community to buy, and for companies across China and abroad to sell.

Alibaba charges for advertising and commission paid by companies who use its virtual marketplaces.

According to its own figures, Alibaba has 279 million active users and 8.5 million sellers.

Just 15 years ago, Jack Ma went to America with his ambitions. No one took him seriously.

He is back now, with a world-record breaking IPO (Initial Public Offering) on the New York Stock Exchange and a personal wealth of £12bn.