Chinese e-commerce conglomerate Alibaba Group Holding has decided to go public in the United States after its bid to list on the Hong Kong exchange failed due to the company's partnership structure.

A high-ranking official, who is close to the Hong Kong Stock Exchange, said it was regrettable that the Hong Kong regulator lost out on the Alibaba listing as it had hoped to have the mainland's largest internet firm list on its exchange.

Many market observers stated that the Hong Kong exchange was likely to lose out on listings from the outstanding mainland internet companies of this generation, though it may have managed to safeguard its reputation for protecting investors.

The market is anticipating high offering prices and estimates from Alibaba.

At present, Alibaba's market value is estimated to be US$200 billion and it plans to raise US$12.9 billion through its listing, which will be the largest IPO following Facebook, which raised US$16 billion in May 2012.

The Alibaba listing could have been the largest IPO ever for both Hong Kong and the mainland and would have earned considerable income for the Hong Kong exchange and the investment banks headquartered in the special administrative region.

Alibaba had proposed a partnership structure, however, which would allow its partners, including the company's founder Jack Ma to nominate a majority of the board of directors to maintain control of the firm, which violates Hong Kong's one-share-one-vote principle.

After a year of negotiations, the proposed partnership structure was still far from being given the green light from the Securities and Futures Commission, the independent statutory body responsible for regulating the securities and futures markets in Hong Kong.

As the commission held a rather conservative attitude in regard to changing its rules, sources told the Shanghai-based China Business News that Alibaba had decided not to wait indefinitely, just in case it missed the best timing for going public on the US exchange.

According to the paper, many market observers were of the view that it is a sad development for the Chinese exchanges as the conservative Hong Kong regulators had driven away the best mainland internet firms, who had picked the United States for their public listing over Hong Kong.

Recently, Jingdong Mall and Sina have successfully applied to raise capital in the United States, while several other Chinese internet firms, including LightInTheBox, 58.com and Qunar are already listed on the Nasdaq.