Despite the potential in China's online market, the emerging e-commerce competition in China between companies that traditionally dominate e-commerce such as Alibaba and those that dominate search

Alibaba takes giant strides

Alibaba picks up digital content stake

"This IPO would give Alibaba a larger financial war chest and stronger international reach to use in this competition," said Lavin of Export Now, which works with Alibaba's online retail platform Tmall.

Still, many foreign investors are learning the Alibaba story for the first time, said Brendan Ahern, a managing director at Krane Shares, a US-based asset management firm.

"As investors learn the history of Alibaba's innovation, business execution and continued success, expectations around the company will rise," said Ahern.

Prior to the IPO, Alibaba has shown particular interest in start-ups in the US by forming a Silicon Valley-based team last year focusing on investment that strengthens its current e-commerce and digital businesses.

"This will allow Alibaba to develop market knowledge and to exploit gaps in the way the incumbents currently cover the market," said Lavin.

"It is smart - at least in these early days of overseas activity - to avoid direct competition with the local incumbents such as Amazon and eBay, and to focus on niche opportunities and elements of the e-commerce ecosystem," Lavin said.

Filed in May and postponed from August to September, Alibaba's IPO has left Wall Street traders "eagerly" waiting, said Otto.

But after the bell-ringing moment on Wall Street, the history-making company will face two challenges as Lavin pointed out.

Alibaba needs to work to keep e-commerce growth in China on track because it remains the core driver of its revenue. It also needs to be able to demonstrate that its recent overseas movements - such as the launch of 11 main.com, its first foray into the US retail market - are performing as planned, said Lavin.

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