Total turnover and mobile penetration rate

Our business and ecosystems have reached a significant scale as a whole, as shown in the figure

Our size

Unless otherwise stated, the above figures are about our "China retail platform" and all the year ended December 31, 2013

Annual merchandise Turnover (GMV) is 248 billion USD (1.542 trillion RMB)

"Singles Day" day, through Alipay turnover (GMV) for 5.8 billion U.S. dollars (36.2 billion RMB)

231 million active buyers

8 million active sellers

Number of transactions in the year 11.3 billion pens

Average number of purchases per active buyer in one year for 49 pens

Mobile end goods turnover 37 billion USD (232 billion RMB)

Mobile-end commodity transactions account for 19.7% of total platform transactions (Note 1:2013 fourth quarter data)

In 2013, mobile Taobao's turnover accounted for 76.2% of China Mobile's total e-commerce turnover

(Note 2: Remove virtual items based on iris data)

136 million months mobile active user

(Note 3: In December 2013, the total monthly active users of mobile apps that generate transactions on our China retail platform)

5 billion packages produced on China retail platform

(Note 4: China Express industry delivered 9.2 billion packages in 2013, according to the China National Post Office data.) We accounted for 54%. )

Trading 3.6 million per second (Note 5: Aliyun trading capacity as of December 31, 2013)

3 million paid sellers (note 6: The number of paid users includes a. China retail platform's paid and paid commission users; As of December 31, 2013, the number of paid users on the wholesale platform, a merchant and we have at least one pay behavior

Buyers from more than 190 countries (note 7: Including registered users of countries and regions a.2013 years, on the Alibaba platform has sent at least one inquiry on the buyer; b.2013 year on the fast selling through Alipay at least once purchased buyers)

The scale of our ecosystem participants

Alipay total turnover of 519 billion USD (3.224 trillion RMB) (Note 8:2013 year, the turnover from China's retail platform accounted for 37.6% of Alipay's total turnover)

More than 620,000 Marketing Alliance members (9:2013-year Marketing alliance members who have received revenue from our platform)

More than 950,000 employees of 31 logistics Partners (Note 10:: April 2013 data provided by logistics partners)

980,000 users (directly or indirectly through third parties) use cloud computing services

More than 4,000 retail operations partners

More than 40,000 Amoy girls

More than 342,000 loans for small micro-loan services

The network effect of our platform

The interaction between buyers and sellers creates a network effect: a large number of sellers attract more consumers, and more consumers attract more sellers. In addition, our platforms are interconnected, and buyers and sellers involved in a platform are also involved in the activities of many of our other platforms, creating a level two network effect that further strengthens our ecosystem.

The chart describes how this network can inject energy into our ecosystem.

Buyers：

• Chinese consumers shopping on Taobao Day cat

• When the buyer in Taobao Browse search-style, can see Taobao, can also see the day cat on the merchandise

• Global consumers shopping on a fast-selling pass

• Global Wholesalers Buy on Alibaba.com

Retail Sellers:

• Small Chinese sellers sell goods on Taobao and fast sellers

• Chinese brand in Taobao, Cat and a good deal, fast selling goods. Global brands sell goods on the International Day Cat.

• Sellers purchase from 1688.com

Wholesale sellers:

• In China, wholesalers and manufacturers supply retailers on 1688.com and Alibaba.com to global sellers.

• Chinese wholesalers and manufacturers supply the global consumer directly on the fast-selling pass

• Global wholesalers and manufacturers supply global buyers on Alibaba.com

Our Market opportunities

Our market opportunities are driven by the following factors:

Our business has benefited from China's growing consumer-driven and mobile-business development to a higher level. Real consumption in China accounted for 36.5% of GDP in 2013, and consumption penetration was significantly lower than in other countries, such as the US, which accounted for 66.8% of GDP in 2013, according to Euromonitor International Consulting data. We anticipate that the growth of consumer power will strongly drive the growth of E-commerce in the online and wireless terminals.

China online shopping penetration rate is relatively low. As of December 31, 2013, the number of Internet users in China reached 618 million, becoming the world's largest Internet users. (CNNIC). According to CNNIC, China has 302 million online consumers in 2013, and we believe that online consumers will continue to grow with the double push of a rising share of Internet users and users.

We believe that the variety of goods and services consumers buy online is expanding, which will further enhance the business activity of online and mobile terminals.

The increased use of mobile devices makes access to the Internet easier, allowing more online shoppers to take part in and drive new applications and functions. As of December 31, 2013, the number of mobile internet users in China reached 500 million, becoming the world's most mobile internet users (CNNIC). And the popularity of mobile devices, will lead to the increasing use of mobile phones.

China's offline retail market faces a variety of challenges: poor infrastructure, limited commodity choices, and uneven product quality. These challenges are particularly evident outside of the one or two-line city, leading consumers to jump online and move shopping directly from offline shopping.

China has an expanding and rapidly improving logistics infrastructure, including nationwide, regional and local delivery services. This rapid development of distributed logistics infrastructure, and the National Express service network is driven by high-speed growth, and will continue to support consumers and sellers unique platform for the demand for electronic commerce.

Overall, in 2013, the online retail market accounted for 7.9% of China's total retail market, as more and more people online shopping, the category continues to increase, is expected to increase in 2013-2016 from the composite annual growth rate of 27.2%, because more consumers online shopping, and each consumer's electricity business consumption is increasing. (Eric Consulting)

Our advantage

We believe that our success stems from the following advantages, which are the main factors that make us stand out from other peers.

Mission-driven management team, "ownership" mentality and proven performance

We believe that the company's management team clear corporate mission, long-term adherence to the values and then determine Alibaba's corporate culture, we have achieved good results of the core. Our management team has created and developed our business leading enterprises, including Taobao trading platform, CAT, Alibaba International station, Ali Cloud computing, and related companies Alipay.

Trustworthy brand

Alibaba, Taobao, Cat and Alipay are China's best-known, respected and trustworthy brands, synonymous with the Internet and mobile commerce. Because of our strong brand reputation, the vast majority of consumers are directly logged into our network retail platform, using the site search engines to find the products and services they need, rather than using Third-party search.

Thriving ecosystems and powerful network effects

We're not just running a company, we're seeing ourselves as stewards of the ecosystem, responsible for making ecosystems thrive and balanced, for the benefit of all participants. This gives us the following advantages:

• Participants have made great contributions to the success and development of ecosystems,

• Our ecosystem expands and creates a powerful network effect, and interaction between participants creates more value for each other.

• The scope of our ecosystem and the network effects it creates, including the large number of buyers from our Taobao trading platform, provide low-cost natural flow for our other platforms and services, and significantly reduce our reliance on sales forces for marketing services.

Leading position on the mobile end

From the mobile end of the turnover, we are China's leading provider of mobile E-commerce. In 2013, the wireless turnover (excluding virtual goods turnover) completed on our "China retail platform" accounted for 76.2% of the total wireless transaction in China in the same period. Based on the number of active users in the month, since August 2012, mobile Taobao has become China's most popular mobile business app. (Eric Consulting)

Scalable Logistics Platform

We provide a distributed and scalable logistics platform and logistics information system for sellers on the platform, providing high quality delivery services to buyers and sellers. This platform model helps solve the nationwide demand for millions of of buyers and sellers to promote a wide range of parcel delivery. The scalability of the network is fully demonstrated by the 2013-Year 11-day processing of 156 million parcels, and the average number of parcels produced per day in 2013 from Chinese retail platforms is 13.7 million.

Reliable, scalable, and cost effective proprietary technology

We develop a reliable, scalable and cost-effective proprietary technology. Our technology is designed to deal with our platform Shanghai volume trading. For example, November 11, 2013 "Singles Day" 24-hour processing of 254 million orders.

Insights into the data

From our platform generated by a large number of transaction data, the ecosystem of interactive data, provide us with valuable information, can help us and sellers to better understand the buyer's shopping habits, so that the seller's operation with efficient, to provide more innovative products and services.

Our "third-party platform" business model

The business model of our unique Third-party trading platform allows us to scale up to fast-growing consumer demand, without the risk of liquidity and capital constraints on inventory, as other proprietary dealers do. This business model protects our profits and strong cash flow, gives us a lot of space and flexibility to invest and develop our platforms, expand our ecosystems, and actively invest in our users, technology, innovative products and strategically important assets.

Our challenge

If the trust of our ecosystems is compromised, there will be serious damage to our reputations and brands.

We may not be able to maintain or enhance the ecosystem's network effects.

Our operating philosophy may have a negative impact on short-term financial performance.

-Our mobile traffic may not be commercially successful.

We may not be able to sustain our culture, which is an important factor in our success.

We may not be able to innovate or compete effectively.

If Alipay's services are limited, our business may be compromised.

We may not be able to maintain revenue growth, and increased investment may have a negative impact on profitability.

Our revenues and net profits may be adversely affected by the slowdown in China and the world economy.

Our variable interest entity structure is risky and uncertain.

China's regulatory and legal system is so complex that future legislation may demand more of our business.

Our strategy

Key elements of our strategy for business development include:

Increase the number of active buyers and purchase frequency

2013, our "China retail platform" on the active buyers, the average purchase of 49 orders, 2012 average purchase of 39 single, 2011 33 orders. We will continue to tap and promote the value of the "China retail platform", attract more new users to our platform, and increase the purchase amount of existing buyers through more repeated purchases and more categories of purchases. We will achieve growth through buyer loyalty programs, marketing, promotional activities, expanding marketing branches, and promoting the use of various e-business apps, such as Mobile Taobao.

Develop new categories and products

Our goal is to increase the consumer's shopping experience, enhance consumer participation, and provide sales opportunities to more businesses by increasing the categories and types of products. We believe that the increase in the commodity category and the type of commodity under each category will increase the average purchase volume of buyers, thereby increasing the overall turnover of goods.

Expand our leading edge on the mobile side

We want to provide consumers with more and broader services, such as local life services, O2O services and digital content, so that we become an indispensable part of consumer life, so as to improve our advantage in the mobile electric business.

We will also continue to increase the base and participation of our mobile users by acquiring and partnering with the leading mobile internet companies.

Help sellers to be more successful

Our goal is to promote the success of a wide range of sellers on the platform by increasing the presence of sellers in front of target buyers. We also offer sellers more tools, such as data science applications, to help them manage customer relationships.

Continuous input to enhance data and cloud computing

We will continue to apply the data intelligence, depth learning technology to a number of areas to implement our data strategy, including market platform design, user interface, search, precision marketing, logistics, location services and our financial services. In addition, we will focus on the cloud computing platform to support our and third party business.

Development of Cross-border E-business opportunities

Our international strategy focuses on the use of natural cross-border linkages in our ecosystems. For example, we will continue to connect brand retailers and Chinese consumers, develop the global shopping of cat, connect Chinese suppliers and the international retail market, develop fast-selling and develop the international wholesale market through Alibaba.com.

Alibaba partner system

Since 1999, Alibaba's founders have been operating and managing the company in the spirit of a partner as they set up a company in Ma Yun's apartment. Alibaba's corporate culture is the cornerstone of our commitment to success and delivering long-term value to our customers. In July 2010, in order to maintain this partnership spirit of the company, to ensure the company's mission, vision, and the sustainable development of values, we decided to formalize the form of partnership, named "Lakeside Partner", from Ma Yun and our founder founded Alibaba, "Lakeside garden." We also call it "Alibaba partner".

We believe that this form of partnership can better manage our business, so that the company's senior managers can avoid bureaucracy and hierarchy. At present, the partnership has a total of 28 members, including 22 Alibaba Group Management and 6 affiliated companies and branches of management. The implementation of the partnership system follows the following principles, policies and procedures.

Alibaba Partners maintain their dynamism by absorbing new partners each year to ensure the team's excellence, innovation and stability. Different from the double shareholding structure with high voting shares to centralize corporate control in the hands of several founders, our governance structure is designed to embody the vision of a large group of partnership managers. This structure is the solution for us to keep the company culture created by the founders within Ali in the future after the founder retires.

• The new partner's election is conducted annually after the nomination process, and the partner selection criteria include: In most cases, the group is not less than five years and 75% of the partners agree. The partner vote is based on one person, one vote.

• Partners are the communicators of our mission, vision and value, both within our Organization and with our customers, business partners and other ecosystem participants.

• During the tenure of the partner, we ask each partner to maintain a certain percentage of the equity.

• Alibaba partners have a unique right to nominate the majority of board directors and require shareholder approval. If the directors nominated by the Alibaba partner are not approved by the shareholders or leave the board for any reason, the Alibaba partner has the right to appoint another person as a temporary shareholder until our next annual shareholder meeting.

Company history

Since we were founded in 199 years, we have demonstrated the success of creating a vibrant business.

• In 1999, we founded the predecessor of Alibaba.com and Alibaba.com.cn,1688.com.

• 2003, we created Taobao

• In 2004, we created Alipay to address the issue of trust between sellers and buyers online.

• 2007, we founded Ali Mother, our online marketing technology platform.

• In 2008, we created a day cat to meet consumer demand for branded products and quality shopping experiences.

• In 2009, we created Alibaba Cloud computing to address the growing data management needs of our platform.

• 2010, we created a mobile phone Taobao application.