1) Only Chinese people buy from Alibaba. The analysis points out that based on the quoted numbers the transaction volume exceeds Visa global peak traffic by ab

1) Only Chinese people buy from Alibaba. The analysis points out that based on the quoted numbers the transaction volume exceeds Visa global peak traffic by about 3x. If a significant fraction of that volume was originating outside of China it would be a household name in major markets. 2) They'd need some sort of huge fulfillment centers a la Amazon. The point is that even if Alibaba doesn't directly own or operate fulfillment and logistics they still need to be handled by somebody. If those fulfillment and logistic solutions are productive they are going to be capital intensive and would require more investment capital than Amazon and UPS combined. If they aren't productive they are going to be labor intensive and going to require a multiple of staff of those two companies combined. Personally I think the analysis is well thought out. Assuming that the numbers aren't completely fabricated from whole cloth the only way that I can reconcile the numbers are: 1) Alibaba's logistic is massively localized and peer to peer. That means that almost all packages are moving a few blocks. Basically, packages of take out from the local shop. 2) Alibaba's transaction volume is mostly digital goods such as virtual flowers, music, etc. Not likely based on what goods are listed. 3) Alibaba is a trading platform. Gambling, currency exchange, commodities, etc. In that case Alibaba serves as a trusted intermediary. At that point transaction volume would be better compared against the NYSE than Visa or Amazon. Personally I think the third option is most likely which would dramatically limit Alibaba's ability to monetize those transactions and it's valuation.