How To Invest In Alibaba UK – Investing in Alibaba For Beginners 2021

If you’re the type of person that shops around online, looking for the best deals, then it’s likely you would’ve come across Alibaba, a Chinese e-commerce platform that pairs customers directly with suppliers. Since its launch in 1999, the Alibaba group has become titans of the e-commerce sector and is often the go-to platform for westerners looking to easily import products from China. After reading this guide you’ll be armed with all the knowledge required to decide if you want to invest in Alibaba and know exactly how to do it.

#1 Broker to Buy Alibaba – eToro

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How to Invest in Alibaba – Step by Step Guide 2021.

If all you’re looking for is a quick guide on how to get started with a quality Alibaba broker, then you’re in the right section. We’ve broken down exactly how to invest in Alibaba in just a few minutes. If you’d like a more detailed guide, complete with images detailing the process you can find it toward the bottom of this page. 

  • Step 1: Open an eToro account: The first thing you’ll need to do is register with eToro. To do this just type “eToro.com” into your browser, press “Join Now” and fill in your details.
  • Step 2: Verify your Identity: Once you’ve created an account you’ll need to verify your identity, doing so is simple, you just need to provide a photo ID (passport, driving licence) and proof of address (utility bill, bank statement).
  • Step 3: Fund your account: After your account has been verified, it’s time to deposit some funds. You can do this with a credit/debit card, bank transfer, or e-wallet.
  • Step 4: Invest in Alibaba: That’s it! Now you’re ready to invest. Just type “Alibaba” into the search bar, press “Trade”, enter the amount you want to invest, and hit “Buy”.

Where to Invest in Alibaba – Choose a Broker

One of the most important steps when you’re starting out as an investor is choosing a good broker. If you don’t do your research you could end up stuck on a platform that has exorbitant fees or lacks the features you require. To prevent this from happening to our readers we’ve created this useful guide to help you choose the best broker for your specific needs.

1. eToro – Best Overall UK Alibaba Broker

If you’ve spent any amount of time looking for a broker, then you’ll have likely heard the name eToro mentioned, and for good reason! Launched in 2007, eToro has become a huge name in the investment space, catering to over 17 million users. It’s hard to argue with the opinion of 17 million people, eToro offers an excellent platform for both new and experienced traders alike. 

Security & Privacy

For the team at eToro, security is paramount. They’re regulated by the FCA and CySEC to ensure strict rules are followed surrounding the protection of customers and their funds. Any sensitive data you provide eToro (think passwords, personal information, etc) is SSL encrypted, making sure it doesn’t fall into the wrong hands. In addition to this, all eToro users can benefit from something called 2FA (2-factor authentication), by enabling 2FA you’ll require an email or text is sent to you in order to confirm important account actions, this provides an extra layer of security in case someone were to gain unlawful access to your account.

Fees & Features

As we mentioned eToro is the perfect platform for both beginners and experienced traders, this is because they offer a range of features tailored to those just starting, while still having enough advanced trading features to keep the experienced entertained. Anyone new to trading can benefit from copy trading, a way of automatically mirroring the trades of more experienced users, allowing you to earn a passive income without much experience. Another great feature for beginners is managed portfolios, a way to invest in a diverse range of assets without much prior knowledge, this is great for reducing your risk. eToro also allows customers to trade in a wide range of markets, including, indices, commodities, stocks, forex, and cryptocurrency. If that wasn’t enough to sway you, eToro also offers commission-free trading which lets you make the most of your investment, without having to worry about pesky hidden fees.

eToro Fees

Fee Type Fee Amount
Alibaba Spread 0%
Commission Fee 0%
Deposit Fee £0
Withdrawal Fee £5
Inactivity Fee £10 (Monthly)

 

Pros

  • Range of markets
  • Copy Trading
  • Managed portfolios
  • Regulated
  • 2FA
  • SSL encryption
  • Range of indicators & charting tools

Cons

  • An unfortunate lack of MetaTrader support

67% of retail investor accounts lose money when trading CFDs with this provider.

2. AvaTrade – Invest in Alibaba Securely

The longest-running platform on our list, AvaTrade has been enabling customers to trade safely & securely since 2006. Although not as well known as competitor eToro, AvaTrade certainly competes in all the areas that count, they’re regulated by the FCA so you don’t have to be concerned about any funds going missing or the company up and vanishing.

Security & Privacy

As a platform that has been running for over 15-years, it’s no surprise that AvaTrade has picked up some tricks when it comes to security. They have to comply with the same strict data-protection rules that eToro and Captial.com do, which means you shouldn’t worry about providing any required information. In addition to 256-bit SSL encryption, AvaTrade makes sure any identity documents or card information is protected by using McAfee Secure. 

Fees & Features

In terms of features, AvaTrade is far from lackluster, they operate in several markets, including commodities, forex, and of course stock CFDs. AvaTrade users can benefit from a range of educational material, which in contrast to Capital.com (which we’ll discuss later), seems to focus on more advanced aspects like technical trading strategies and economic indicators, although they still provide some material for beginners. Just like the other two platforms on our list, AvaTrade is commission-free, ensuring you don’t get swindled out of your investment. 

AvaTrade Fees

Fee Type Fee Amount 
Alibaba Spread 0.13%
Commision Fee 0%
Deposit Fee £0
Withdrawal Fee £0
Inactivity Fee £50 after 3 months & £100 after 12 months

 

Pros

  • Guides on technical & economic indicators 
  • Great security
  • Regulated
  • Range of markets

Cons

  • Could do with more material for true-beginners
  • High inactivity fees

Your Capital is at Risk.

3. Capital.com – Invest in Alibaba CFDs

Capital.com review

By far the youngest platform on this list Capital.com, launched in 2016, has grown hugely in popularity serving around 800,000 users. From your first glance at their website, it’s clear they focus more so on catering toward beginners, you can see this from their simple interface and plethora of beginner-focused educational material. That being said, please don’t think Capital.com is exclusively for beginners, they still pack in a lot of advanced features.

Security & Privacy

There’s no question that Capital.com provides its users with great security, they’re regulated by the FCA and CySEC, once again meaning they have to comply with strict data protection rules and are subject to audits ranging from quarterly to annually. They also have FDIC insurance, meaning that if Capital.com were to be compromised you’re insured on balances up to £85,000. Rather than using SSL to protect sensitive information, Capital.com instead goes the route of encryption via Transport Layer Security, preventing any would-be hackers from intercepting your information. 

Fees & Features

If you’re looking to invest in Alibaba, Capital.com is an excellent platform for users of all skill levels, especially those just starting out. They offer some very interesting features, the main draw being the huge selection of educational resources, they have a beginners-guide on almost every aspect of trading, from basics to understanding different financial instruments. It’s always great to see a platform going the extra mile for learners. However, please don’t think Capital.com is aimed solely at those without much experience, they have a well-rounded set of features for all users, including, TradingView integration, market research, and spread betting, which allows users to earn tax-free profits.

Capital.com Fees

Fee Type Amount
Alibaba Spread 0.04%
Commission 0%
Withdrawal Fee £0
Deposit Fee £0
Inactivity Fee £0

 

Pros

  • Huge range of educational resources
  • Market research
  • Commission-free
  • Low spreads
  • Sound security 

Cons

  • Could benefit from some additional advanced features
  • Only CFDs and stocks are available

 76.72% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider.

Invest in Alibaba UK – Broker Price Comparison

If you’re looking for an easy-to-reference chart comparing the fees of our top brokers, then look no further!

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee
eToro 0% £0 £0 £10 monthly (after 12 months inactivity)
AvaTrade 0% £0 £0 £50 after 3 months, £100 after 12 months
Capital.com 0% £0 £0 £0

 

What are the Different Kinds of Stocks? 

When you’re choosing how you want to invest in Alibaba, you need to consider which method of investing is right for you. It can be confusing when those new to trading are hit with a heap of financial jargon, which is why we’ve created this handy explanation on the 3 most popular ways to invest.   

Stocks 

Investing in stocks is probably the method you’re most familiar with, stocks have been around since 1611, so they’re certainly not a new concept. The great thing about a stock (sometimes called a share) is it grants you fractional ownership of a company, this means that when you buy a stock you are in essence a part-owner of the company. This is reflected in the fact that if you buy enough of a company’s stock you can vote on how it’s run, giving you some control over the direction the company is taken. Additionally, you can also receive dividends, which are a company’s way of paying some of its profits forward to investors. In contrast to an ETF or CFD, you do own the underlying asset, meaning that regardless of what happens, unless you choose to sell, you will always own those shares.

ETFs (Exchange Traded Funds)

An exchange-traded fund, or ETF for short, is another way you can invest in Alibaba. Essentially, an ETF is a group of assets bundled together by a management fund, instead of investing in the actual assets, you invest in a portion of the bundle. In a similar way to a stock, you still make money based on the assets rising in value and can lose money if they decrease. Typically, an ETF reduces your risk exposure because rather than a singular asset, you’re invested in multiple, meaning if one decreases in value, the others can keep you afloat. Although you can still receive dividends when investing in an ETF, you don’t own any of the underlying assets.

CFDs (Contract For Difference)

The final investment method we’ll discuss is a CFD or contract for difference. This method is slightly different from the previous two, instead of buying a stock or into a fund, you speculate on if an asset will rise or fall in price, earning the difference between your entry and exit. Generally, this is better suited to short-term investors looking to capitalise on quick market swings as you can use leverage to hugely magnify any profits you’d make. Just like an ETF, you’re not investing in the underlying asset and therefore do not own it. 

Best Ways to Invest in Alibaba UK

Now that we’ve discussed the differences between the 3 most popular investment types, it’s only fitting that we speak about who can best make use of each method. Although you can’t take a one-size-fits-all approach to your investments, the best option will depend on how long you plan on holding your investment and your risk tolerance. 

Invest in Alibaba CFDs

Are you looking to take advantage of small market swings or start day trading? Then you’ll probably be interested in trading CFDs. For anyone looking to make short-term investments then CFD trading doesn’t have an equal in terms of convenience and features. Because you’re simply speculating on price changes, you don’t have to buy and sell anything, instead, you just bank profits and move on to the next trade. Typically, because you’re taking advantage of small changes you might need to use leverage to see some good profits unless of course, you have significant capital ready to invest.

Invest in Alibaba ETFs

If you’re looking for a bridge between a CFD and regular stocks then investing in ETFs could be ideal for you. This method is typically suited to anyone looking to make medium-length investments, as it provides lesser risk when compared to CFDs while still retaining steady growth. If you want to speed up the process, or simply magnify your return-on-investment, then I’m sure you’ll be happy to know you can also trade leveraged ETFs, giving the potential to make huge profit with only a small investment. As with a CFD, you don’t own any of the underlying assets and therefore can be subject to liquidation if prices go haywire. 

Invest in Alibaba Stocks

If you believe in the long-term prospects of a company and believe they will continue to grow, then it doesn’t get much better than investing in stocks. When you buy a stock you’re buying a portion of the company, therefore with enough shares, you can gain voting rights, giving you some say on how the company is run; perfect for the long-term investor.

Is Alibaba a good investment UK? 

E-commerce giant Alibaba has had a shaky few months with a few regulatory issues along the way, but with the stock far more affordable than this time last year, many investors have been left wondering if it’s a good time to invest in Alibaba. While a drop in stock price may worry some, it’s left others wanting to cash in on their bounce back to the top and with their cloud computing services starting to take off, there is certainly potential. Additionally, those with a reasonable amount of cash to invest can even earn a passive income from stocks, this allows you receive quarterly or annual payouts, while still earning profit from your shares rising in value. When you’re in it for the long-term these payouts can provide much-needed liquidity for investors that have otherwise needed to sell off a portion of their shares. 

E-commerce is Booming

It’s no secret that e-commerce is likely the future of shopping. As more and more people gain unfettered access to internet-enabled devices, why wouldn’t we shift to e-commerce? It provides users with a way to browse through millions of products from the comfort of their own home while removing middlemen that’ll often buy from China and sell the products in western countries. With the e-commerce sector growing by over 33% since 2018 and projections of a further 50% growth by 2024, Alibaba could easily soar to new heights. 

Alibaba Cloud

Recently, Alibaba has begun to diversify its offerings, which I’m sure will be a welcome change for investors as around 87% of Alibaba’s revenue was coming from e-commerce. One area they have ventured into is cloud computing, currently, their new business Alibaba Cloud is the largest cloud computing business in China. As cloud computing continues to grow in popularity it makes sense that Alibaba could take the market by storm, especially in China.

Investing in Alibaba – What are the Risks

As we mentioned, Alibaba has had a shaky few months, while this has left some wanting to secure as much stock as possible for this reduced price, some investors are fearful their holdings will continue to fall in value. In the last decade, Alibaba has not had a lot of competition, especially in China, which is part of the reason it’s grown to the size it has. However, this has left a lot of new companies wanting to cash in on this gap in the market,

Increased Competition 

Since its launch in 1999, Alibaba has grown to have a hold over the e-commerce sector, especially in China. Until fairly recently there has been almost no competition for Alibaba, leaving them to dominate the Chinese markets. However, this is beginning to change, more and more companies are entering the e-commerce space, and they’re beginning to grow to a size where they could start causing trouble for Alibaba. While for the time being Alibaba is earning more than 7 times the revenue of its closest competitor, Pinduduo, as people look for alternatives to mega-corps, who knows what’s going to happen. 

New Ventures Not Very Profitable

One area that was worrying for Alibaba investors was the lack of diversity, with the majority of their revenue being generated from commissions on its e-commerce platform. In 2021, this is less of an issue, with Alibaba venturing into areas like cloud computing. Unfortunately, as if current, these ventures have been mostly unprofitable, although this can be expected from any new business, Alibaba is reliant on its e-commerce cash to prop up these more recent ventures.

How to Invest in Alibaba with eToro

We understand it can be difficult to sift through all the information out there regarding how to invest in Alibaba, which is why we’ve created this detailed guide to make sure our readers have the best possible time when getting started with investing. Below, you can find our guide on how to get started with the best platform to invest in Alibaba, eToro. 

Step 1: Open an account with eToro

The first thing you’ll need to do when investing in Alibaba is register with a broker. We recommend eToro because they offer users a simple-to-understand interface, great security, and more features than you could shake a stick at. Simply type “eToro.com” into your browser, press “Join Now” and fill in some basic information. 

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67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Verify your account

Once you’ve created your eToro account, you’ll need to verify it. This is because eToro is a regulated trading platform and has to comply with strict rules surrounding customer protection. Don’t worry though, it’s standard procedure for all reputable brokerages. All you’ll need to provide is a photo ID (passport, driving licence) and proof of address (utility bill, bank statement).

Step 3: Fund your account

After your account has been verified, you’re ready to move on to the next step; funding your account. To do this just click on “Deposit Funds” enter the amount you want to invest and press “deposit”. You can do this with either a credit/debit card, bank transfer, or e-wallet (PayPal, Skrill, etc). Shortly after, your funds will arrive in your account. 

Step 4: Invest in Alibaba!

Now that you’ve funded your eToro account, you’re ready to invest! Just type “Alibaba” into the search bar, press “Trade”, enter the amount you’d like to invest, and press buy. That’s it, you’re now an Alibaba investor! 

Conclusion

If you’re looking to make an investment in Alibaba then it makes sense to act while the price is low, currently, the Alibaba stock price has dropped by 37.5% YTD, meaning it could be worthwhile investing before the price begins rising again. If you’re ready to pull the trigger on an investment, then after consideration, we can recommend regulated broker eToro, they provide a seamless onboarding process, simple interface, great features, and excellent security, making it the perfect platform for both beginners and experienced traders alike.

#1 Broker to Buy Alibaba – eToro

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

FAQs

What is an Alibaba CFD?

What is an Alibaba ETF?

What’s the Future of Alibaba?

Stocks vs ETFs/CFDs

Where can I Invest in Alibaba UK?

 

About Jay Leonard PRO INVESTOR

Jay is a UK based cryptocurrency expert, specialising in fundamental analysis and medium to long term investments. He has a great deal of hands on experience in the space and a current focus on institutional adoption.