Form F-1 REGISTRATION STATEMENT
Our Mission


Our mission is to make it easy to do business anywhere.

Our founders started our company to champion small businesses, in the belief that the Internet would level the playing field by enabling small enterprises to leverage innovation and technology to grow and compete more effectively in the domestic and global economies. Our decisions are guided by how they serve our mission over the long-term, not by the pursuit of short-term gains.


Our Business


We are the largest online and mobile commerce company in the world in terms of gross merchandise volume in 2013, according to industry sources. We operate our ecosystem as a platform for third parties, and we do not engage in direct sales, compete with our merchants or hold inventory.

We operate Taobao Marketplace, China’s largest online shopping destination, Tmall, China’s largest third-party platform for brands and retailers, in each case in terms of gross merchandise volume, and Juhuasuan, China’s most popular group buying marketplace by its monthly active users, in each case in 2013 according to iResearch. These three marketplaces, which comprise our China retail marketplaces, generated a combined GMV of RMB1,542 billion (US$248 billion) from 231 million active buyers and 8 million active sellers in the twelve months ended December 31, 2013. A significant portion of our customers have begun transacting on our mobile platform, and we are focused on capturing this opportunity. In the three months ended December 31, 2013, mobile GMV accounted for 19.7% of our GMV, up from 7.4% in the same period in the previous year.

In addition to our three China retail marketplaces, which accounted for 82.7% of our revenues in the nine months ended December 31, 2013, we operate Alibaba.com, China’s largest global online wholesale marketplace in 2013 by revenue, according to iResearch, 1688.com, our China wholesale marketplace, and AliExpress, our global consumer marketplace, as well as provide cloud computing services.

As a platform, we provide the fundamental technology infrastructure and marketing reach to help businesses leverage the power of the Internet to establish an online presence and conduct commerce with consumers and businesses. We have been a leader in developing online marketplace standards in China. Given the scale we have been able to achieve, an ecosystem has developed around our platform that consists of buyers, sellers, third-party service providers, strategic alliance partners, and investee companies. Our platform and the role we play in connecting buyers and sellers and making it possible for them to do business anytime and anywhere is at the nexus of this ecosystem. Much of our effort, our time and our energy is spent on initiatives that are for the greater good of the ecosystem and the various participants in it. We feel a strong responsibility for the continued development of the ecosystem and we take ownership for this development. Accordingly, we refer to this as “our ecosystem.”

Our ecosystem has strong self-reinforcing network effects that benefit our marketplace participants, who are invested in our ecosystem’s growth and success. Through this ecosystem, we have transformed how commerce is conducted in China and built a reputation as a trusted partner for the participants in our ecosystem.
We have made significant investments in proprietary technologies and infrastructure in order to support our growing ecosystem. Our technology and infrastructure allow us to harness the substantial volume of data generated from our marketplaces and to further develop and optimize the products and services offered on our platform.

Through, our related company, Alipay, we offer payment and escrow services for buyers and sellers, providing security, trust and convenience to our users. We take a platform approach to shipping and delivery by working with third-party logistics service providers through a central logistics information system operated by Zhejiang Cainiao Supply Chain Management Co., Ltd., or China Smart Logistics, our 48%-owned affiliate. Through our investment in UCWeb, we are able to leverage its expertise as a developer and operator of mobile web browsers to enhance our mobile offerings beyond e-commerce, such as general mobile search.

Our revenue is primarily generated from merchants through online marketing services (via Alimama, our proprietary online marketing platform), commissions on transactions and fees for online services. We also generate revenues through fees from memberships, value-added services and cloud computing services. In the nine months ended December 31, 2013, we generated revenue of RMB40.5 billion (US$6.5 billion) and net income of RMB17.7 billion (US$2.9 billion). Our fiscal year ends on March 31.
Our Market Opportunity
Our market opportunity is primarily driven by the following factors:

•	 	Our business benefits from the rising spending power of Chinese consumers. China’s real consumption in 2013 was 36.5% of total GDP, which is a rate that is significantly lower than that of other countries, such as the United States, which had a consumption penetration rate of 66.8% in 2013, according to Euromonitor International. We believe that growth in consumption will drive higher levels of online and mobile commerce.
•	 	China’s online shopping population is relatively underpenetrated. According to the China Internet Network Information Center, or CNNIC, China had the world’s largest Internet population with 618 million users as of December 31, 2013. According to CNNIC, China had 302 million online shoppers in 2013. We believe the number of online shoppers will increase, driven by continued growth in Internet users as well as by the higher percentage of Internet users making purchases online.
•	 	We believe that consumers are expanding the categories of products and services they are purchasing online, which will further increase online and mobile commerce activity.
•	 	We believe that the increased usage of mobile devices will make access to the Internet even more convenient, drive higher online shopper engagement and enable new applications. China has the world’s largest mobile Internet user base with 500 million users as of December 31, 2013, according to CNNIC, and mobile usage is expected to increase, driven by the growing adoption of mobile devices.
•	 	China’s offline retail market faces significant challenges due to few nationwide brick and mortar retailers, an underdeveloped physical retail infrastructure, limited product selection and inconsistent product quality. These challenges in China’s retail infrastructure, which we believe are particularly acute outside of tier 1 and 2 cities, are causing consumers to leapfrog the offline retail market in favor of online and mobile commerce.
•	 	China has an increasingly extensive and rapidly improving logistics infrastructure consisting of nationwide, regional and local delivery services. We believe that the rapid development of China’s distributed logistics infrastructure and nationwide express delivery networks has been driven in part by the growth of e-commerce and will continue to support the unique demands of consumers and merchants conducting e-commercetransactions on marketplaces.
Overall, online shopping, which represented 7.9% of total China consumption in 2013, is projected to grow at a compound annual growth rate, or CAGR, of 27.2% from 2013 to 2016, according to iResearch, as more consumers shop online and e-commerce spending per consumer increases.
Our Strengths
We believe that the following strengths contribute to our success and are differentiating factors that set us apart from our peers.
•	 	Management Team with Owner Mentality and Proven Track Record. Our management team’s clear sense of mission, long-term focus and commitment to the values that define the Alibaba culture have been central to our successful track record. Our management team has created and grown leading businesses organically, including Taobao Marketplace, Tmall, Alibaba.com, Alibaba Cloud Computing and our related company Alipay.
•	 	Trusted Brands. Alibaba, Taobao, Tmall and Alipay are well recognized and trusted brands in China. Due to the strength of these brands, a majority of our customers navigate directly to our China retail marketplaces to find the products and services they are seeking instead of via third-party search engines.
•	 	Thriving Ecosystem with Powerful Network Effects. We are the steward of a thriving ecosystem, which provides us with the following key advantages:
•	 	participants in our ecosystem are invested in its success and growth;
•	 	interactions among participants create value for one another as our ecosystem expands and generates strong network effects; and
•	 	the scope of our ecosystem and the network effects it creates, including the significant buyer traffic generated by our Taobao Marketplace, provide low-cost organic traffic for our other marketplaces and services and significantly reduce our reliance on a sales force for our marketing services.
•	 	Mobile Leadership. We are the leader in mobile commerce in China in terms of mobile retail GMV, with mobile GMV transacted on our China retail marketplaces accounting for 76.2% of total mobile retail GMV (excluding virtual items) in China in the twelve months ended December 31, 2013, according to iResearch. Our Mobile Taobao App has been the most popular mobile commerce app in China by mobile MAUs every month since August 2012, according to iResearch.
•	 	Scalable Logistics Platform. We offer sellers on our marketplaces the benefits of a distributed and scalable logistics platform and information system to provide high quality delivery services to sellers and buyers on a large scale. Our platform approach helps to address the requirements of facilitating the delivery of packages across a wide range of product categories from millions of sellers to millions of buyers in dispersed locations across China. The scalability of this network was demonstrated by its success in handling of 156 million packages generated on our Singles Day promotion in 2013 compared to a daily average of 13.7 million packages generated from transactions on our China retail marketplaces in 2013.
•	 	Reliable, Scalable and Cost-effective Proprietary Technology. We have developed proprietary technology that is reliable, scalable and cost-effective. Our technology is designed to handle the large volume of transactions on our marketplaces. For example, we successfully processed 254 million orders within 24 hours during our Singles Day promotion on November 11, 2013.
•	 	Data Insights. Data from consumer behavior and transactions completed on our marketplaces and interactions among participants in our ecosystem provide us with valuable insights to help us and our sellers improve the buyer experience, operate more efficiently and create innovative products and services.
•	 	Third-party Platform Business Model. Our exclusively third-party platform business model allows us to scale rapidly without the risks and capital requirements of sourcing, merchandising and holding inventory borne by direct sales companies. This business model drives our profitability and strong cash flow, which give us the flexibility to further invest in and improve our platform, expand our ecosystem and aggressively invest in people, technology, innovative products and strategically important assets.

Our Strategies


The key elements of our strategy to grow our business include:

•	 	Increase Active Buyers and Wallet Share. In 2013, the average active buyer on our China retail marketplaces placed 49 orders, up from 39 orders in 2012 and 33 orders in 2011. We will continue to develop and market the value proposition of our retail marketplaces to attract new buyers as well as to increase the wallet share of existing buyers through more frequent buying and buying across more product categories. We intend to achieve growth through customer loyalty programs, high quality customer service, marketing and promotional campaigns, and expansion of marketing affiliates, as well as by promoting the usage of our various mobile commerce apps such as our Mobile Taobao App.
•	 	Expand Categories and Offerings. We aim to enhance the shopping experience for consumers, increase consumer engagement and create additional opportunities for merchants by developing and promoting additional categories and offerings. We believe that growth in the number of product and service categories and products and services purchased within each category contributes to higher average spending per customer and increases GMV.
•	 	Extend Our Mobile Leadership. We intend to build upon our strength in mobile commerce to develop a broader spectrum of consumer offerings, such as location-based services, O2O services and digital content, in order to fulfill our vision of becoming central to the everyday lives of our customers. We will also continue to look for ways to increase our mobile user base and engagement through strategic alliances, investments and acquisitions.
•	 	Enhance the Success of Sellers on a Broad Basis. We aim to increase the success of a broad base of sellers on our marketplaces by increasing their exposure to relevant buyer demand and providing them with more tools such as data science applications to manage their relationships with customers.
•	 	Enhance Data and Cloud Computing Technologies. We will continue to implement our data strategy through the application of data intelligence and deep learning technologies to several fields, including marketplace design, user interface, search, targeted marketing, logistics, location-based services and financial services, among others. In addition, we will continue to invest heavily in our cloud computing platform to support our own businesses and those of third parties.
•	 	Develop Cross-border Commerce Opportunities. Our international strategy is focused on leveraging natural cross-border linkages to our ecosystem. For example, we will continue to grow our international business by connecting overseas branded retailers to Chinese consumers (Tmall Global), connecting Chinese suppliers to international retail markets (AliExpress) and international wholesale markets (Alibaba.com).


Alibaba Partnership


Since our founders first gathered in Jack Ma’s apartment in 1999, they and our management have acted in the spirit of partnership. We view our culture as fundamental to our success and our ability to serve our customers, develop our employees and deliver long-term value to our shareholders. In July 2010, in order to preserve this spirit of partnership and to ensure the sustainability of our mission, vision and values, we decided to formalize this partnership as Lakeside Partners, named after the “Lakeside Gardens” residential community where Jack and our other founders started our company. We refer to the partnership as the Alibaba Partnership.

We believe that our partnership approach has helped us to better manage our business, with the peer nature of the partnership enabling senior managers to collaborate and override bureaucracy and hierarchy. The Alibaba Partnership currently has 28 members comprised of 22 members of our management and six members of the management of our related companies and affiliates. The partnership operates under principles, policies and procedures that have evolved with our business and are described below.

Our partnership is a dynamic body that rejuvenates itself through admission of new partners each year, ensuring excellence, innovation and sustainability. Unlike dual-class ownership structures that employ a high-vote class of shares to concentrate control in a few founders, our approach is designed to embody the vision of a large group of management partners. This structure is our solution for preserving the culture shaped by our founders while at the same time accounting for the fact that founders will inevitably retire from the company.

•	 	New partners are elected annually after a nomination process based on a number of criteria including, in most cases, not less than five years of tenure, and that require a 75% approval of all of the partners. Partnership votes are made on a one-partner-one-vote basis.
•	 	Partners are evangelists for our mission, vision and values, both within our organization and externally to customers, business partners and other participants in our ecosystem.
•	 	We require each partner to maintain a meaningful level of equity interests in our company during such individual’s tenure as a partner.
•	 	The Alibaba Partnership will have the exclusive right to nominate for shareholder approval a simple majority of the members of our board of directors. If an Alibaba Partnership director nominee is not elected by our shareholders or departs our board of directors for any reason, the Alibaba Partnership has the right to appoint a different person to serve as an interim director until our next scheduled annual general meeting of shareholders.

Our Challenges


We believe some of the major risks and uncertainties that may materially and adversely affect us include the following:

•	 	any failure to maintain the trusted status of our ecosystem could severely damage our reputation and brand;
•	 	we may not be able to maintain or improve the network effects of our ecosystem;
•	 	our operating philosophy may negatively influence our short-term financial performance;
•	 	we may not be able to successfully monetize our mobile traffic;
•	 	we may not be able to maintain our culture, which has been a key to our success;
•	 	we may not be able to innovate or compete effectively;
•	 	if the services Alipay provides to us are limited or restricted, our business would be harmed;
•	 	we may not be able to sustain our revenue growth rate, and increased investments in our business may negatively affect our margins;
•	 	our revenue and net income may be materially and adversely affected by any economic slowdown in China as well as globally;
•	 	there are risks and uncertainties associated with our variable interest entity structure; and
•	 	the regulatory and legal system in China is complex and developing, and future regulations may impose additional requirements on our business.

We also face other challenges, risks and uncertainties that may materially and adversely affect our business, financial condition, results of operations and prospects. You should consider the risks discussed in “Risk Factors” and elsewhere in this prospectus before investing in our ADSs.


Corporate History and Structure


We have a demonstrated track record of successful organic business creation since our founding in 1999.

•	 	In 1999, we founded Alibaba.com and Alibaba.com.cn, the predecessor of 1688.com.
•	 	In 2003, we launched Taobao Marketplace.
•	 	In 2004, we established Alipay to address the issue of trust between buyers and sellers online.
•	 	In 2007, we launched Alimama, our online marketing technology platform.
•	 	In 2008, we launched Tmall to address an increasing consumer need for branded products and a premium shopping experience.
•	 	In 2009, we established Alibaba Cloud Computing to handle the increasing data management needs on our platform.
•	 	In 2010, we launched the Mobile Taobao App.
Alibaba Group Holding Limited is a Cayman Islands holding company established on June 28, 1999, and we conduct our business in China through our subsidiaries and variable interest entities.


Risks Related to Our Business and Industry


Maintaining the trusted status of our ecosystem is critical to our success, and any failure to do so could severely damage our reputation and brand, which would have a material adverse effect on our business, financial condition and results of operations.

We have established a strong brand name and reputation for our ecosystem in China. Any loss of trust in our platform could harm the value of our brand and result in buyers and sellers ceasing to transact business on our marketplaces as well as participants reducing the level of their commercial activity in our ecosystem, which could materially reduce our revenue and profitability. Our ability to maintain our position as a trusted platform for online and mobile commerce is based in large part upon:

•	 	the reliability and security of our platform;
•	 	the functionality of products and the wide range of services and functionality we make available to participants on our platform;
•	 	the rules governing our marketplaces;
•	 	the quality and breadth of products and services offered by sellers through our marketplaces;
•	 	the strength of our consumer protection measures; and
•	 	our ability to provide reliable and trusted payment and escrow services through our arrangements with our related company Alipay.