Online marketplaces held in the Fund include China-based AlibabaGroup Holding Limited (BABA, Financial), the world’s largest e-commerce company by gross merchandise value. Alibaba’s dominant franchise benefits from massive scale and powerful network effects; a rapidly expanding e-commerce market even with the recent slowdown in China; and an advertising-centric, asset-light business model that produced strong profit margins. Further, in many of China’s Tier II and III cities, Alibaba is enabling commerce as bricks and mortar competitors are often scarce.
Baron Funds Spring Newsletter: Investing in the International Equity Markets.
