Sales 2023: RMB 31.482 billion (€ 4.110 billion)

Overview

Alibaba was founded in 1999 as a B2B online marketplace for Chinese companies seeking to sell their goods globally. In 2019, Alibaba ranked fifth among global internet companies, just behind Facebook, but the group has since expanded beyond its roots, expanding into finance, traditional and digital media, and film production and distribution. Co-founder Jack Ma, who stepped down as chairman in 2019, is synonymous with entrepreneurship for many Chinese. In 2019, Ma was ranked number one on Forbes' list of China's richest people. Today, Alibaba is one of the world's largest internet and media companies, employing around 235,000 people.

General Information

Headquarters
969 West Wen Yi Road
Yu Hang District
Hangzhou 311121
Zhejiang Province
China
Telephone 0086 571 8502-2088
Website: http://www.alibabagroup.com

Branches of trade: digital media, e-commerce for wholesale and retail, cloud computing
Legal form: Stock Company
fiscal year: 01.04. – 31.03.
Founding year: 1999

Basic economic data (in billion RMB)

	2023	2022	2021	2020	2019	2018
Total sales	868,687	853,062	717,289	509,711	376,844	250,266
Sales “digital media and entertainment”	31,482	32,272	31,186	20,094	24,286	19,564
Profit	72,509	61,959	150,308	149,263	87,6	61,412
Stock price (year end)	73,01	88,09	118,79	232,73	217,00	139,75
Employees	235.216	254.941	251.462	117.600	101.958	66.421

Executives and Directors

Management:

• Daniel Yong Zhang, Chairman and Chief Executive Officer
• Joseph C. Tsai, Executive Vice Chairman
• Toby Xu, Chief Financial Officer
• J. Michael Evans, Director and President
• Maggie Wei Wu, Director
• Judy Tong, Chief People Officer
• Li Cheng, Chief Technology Officer
• Sara Yu, General Counsel
• Jessie Zheng, Chief Risk Officer, Chief Platform Governance Officer, Chief Customer Officer
• Trudy Dai, President of Core Domestic E-commerce

 
Board of directors:

• Daniel Yong Zhang, Chairman and Chief Executive Officer
• Joseph C. Tsai, Executive Vice Chairman
• J. Michael Evans, Director and President
• Maggie Wei Wu, Director
• Kabir Misra, Director
• Chee Hwa Tung, independent director
• Walter Teh Ming Kwauk, Independent Director
• Jerry Yang, Independent Director
• Wan Ling Martello, independent director
• Weijian Shan, independent director
• Irene Yun-Lien Lee, Independent Director
• Albert Kong Ping Ng, Independent Director

History

Alibaba: a legendary "rags-to-riches" story in China. Ma Yun, a rather thin teacher who grew up in poverty (and chose the English name "Jack"), brought together seventeen ambitious young people in the late 1990s who saw the internet as a new, virtual marketplace. At a time when internet usage in China was still low but growing steadily. In 1998, there were just 2.1 million users in China, out of a total population of more than 1.2 billion. The idea was a website that would allow exporters to post offers that online customers could then purchase directly, bypassing retailers. Within a very short time, the "scabby" company received investments from Goldman Sachs (five million dollars) and Japan's SoftBank (20 million dollars). "We will succeed because we are young and never give up," Ma reportedly told his small group of employees.
 
Alibaba's tremendous success since its founding in 1999, however, has benefited greatly from the consumer revolution taking place in China. Growth was sluggish in the 1990s and 2000s. And even when China overtook Japan to become the world's second-largest economy, major infrastructure projects and the real estate sector were the main contributors. Strong growth could not disguise weak domestic consumption. Debate persisted over whether the Chinese, who traditionally placed more emphasis on saving than spending, could become a consumer society. There was widespread agreement that China's transition from an industrial to a consumer economy (where people feel the "urge to spend") would not be easy. Today, however, analysts emphasize that Chinese consumers are a "transformative force" not only in China but globally. It's hard to imagine such a transition ever being in doubt. Despite some slowdown due to the ongoing trade war with the United States, consumption in China, now the world's largest consumer market, has remained strong. In 2018, total consumption exceeded $5.3 trillion.

Alibaba's growth in the early 2000s centered on its online business-to-business marketplace, which brings together importers, exporters, and global shipping and air freight services. The company turned its first profit in 2002 and, at that time, had 400 employees. Alibaba's evolution into a fully-fledged online marketplace, directly engaging consumers, was spurred in 2003 with the launch of its online shopping platform Taobao. This was a response to eBay's 2002 entry into the Chinese market through its purchase of the Chinese auction site EachNet. A number of competitors, including JD.com, VIPshop, Pin Duo Duo, and others, followed Taobao. This was a period for the Alibaba Group that would prepare it for its leadership role as a fully-fledged online marketplace. In 2004, Alibaba launched Alipay, a simple, secure payment solution for online consumers (later under Alibaba's subsidiary Ant Financial), which facilitated payments on Taobao and Tmall and partnered with numerous financial institutions, including Visa and Mastercard, as well as a growing number of local online businesses. Alipay made it possible for Chinese people to conduct transactions directly with their mobile devices, whether online or by scanning QR codes in retail stores, which soon included convenience stores, restaurants, and even street vendors.

Despite eBay's initial high hopes for success in the Chinese market, by 2006, this main foreign competitor was ousted because it could not compete with Taobao, which at that time held a 60 percent share of the domestic B2B and B2C market. Alibaba's next step was the development of Tmall (formerly Taobao Mall), a business-to-consumer platform similar to Amazon. In 2009, Alibaba entered the growing cross-border e-commerce market and launched the beta version of AliExpress, a service that allows Chinese sellers to directly reach international online buyers (although not in China). In 2014, Alibaba launched its popular cross-border e-commerce (or "haitao") platform, Tmall Global, which provides Chinese consumers with a direct connection to foreign retail platforms. The trend toward cross-border shopping in China, based on the Chinese people's strong interest in foreign goods, which are often perceived as higher quality, grew at an extraordinary pace: in 2011 it increased by almost 75 percent and reached a market size of 600 billion dollars.

In 2009, at the urging of Daniel Zhang, then Chief Operating Officer, the company made a decision that would reshape China's consumer landscape. The idea was to hold an annual Singles Day shopping festival on November 11, a day that has been celebrated in China since the 1990s (although its origins are unclear) as a day for young men at Chinese universities to celebrate single life. Zhang's idea was to further expand the Alibaba brand through a major nationwide online sales event. At the first event in 2009, the total value of goods sold through Alibaba's platforms reached $7.8 million—a humble beginning for what would become a Chinese cultural phenomenon affectionately known as "Double 11" within a few years. In 2017, the event generated more than $25 billion, and on Singles Day 2019, sales in the first 14 seconds rose to over $140 million. After one and a half minutes, the number was 1.4 billion.

E-commerce and retail remain Alibaba's core businesses. As of July 2019, the group held a 55.9 percent share of the Chinese e-commerce market. In addition, Alibaba has established a variety of other services in related segments, including online payments, consumer finance, and logistics. In 2013, Alibaba launched "Cainiao," also known as "China Smart Logistics," a national network of logistics and courier companies (with an initial investment of $43 billion), enabling Alibaba to reach 100 percent of consumers in China within 24 hours. In 2014, Alibaba went public in New York, raising $25 billion in what was then the largest IPO in history. Ant Financial, founded in October 2014, is Alibaba's financial services company and operates the Alipay service launched in 2004. Alimama, founded in 2007, is the group's marketing division, specializing in e-commerce marketing and the application of AI. In 2017, Alimama launched a new marketing optimization platform called TMOP, which uses digital tools and AI to connect retailers with online customers.

In recent years, the group has also sought to diversify. With the launch of Alibaba Cloud in 2009, the company entered the growing cloud services industry, which provides online database, storage, management, and application services. Revenue in this segment grew by 84.5 percent between 2018 and 2019, more than doubling its share of Alibaba's total revenue to 7 percent. In 2013, Alibaba began actively expanding into the entertainment segment. That year, the company acquired a music streaming app called TTpod, which became the foundation of Alibaba Planet, allowing music fans to follow their favorite artists, purchase related merchandise, and participate in fan activities. AliMusic was formed in March 2015 through the merger of Alibaba Planet with Xiami Music, an online music website with a massive library. The merger was intended to give the group a 20 percent share of China's digital music industry, but Alibaba has lagged behind other players in this market, particularly Tencent Music (which controls around 80 percent of the market). Today, Alibaba is an outsider in the streaming music market. In 2014, Alibaba acquired a majority stake in ChinaVision Media, which then became Alibaba Pictures Group, now the flagship of Alibaba's growing entertainment business. The following year, the company made its first investment in a Hollywood production, acquiring a minority stake in Paramount Pictures' "Mission: Impossible – Rogue Nation."

Having secured Alibaba's dominance in the Chinese e-commerce market, the group has increasingly focused on expanding its international business in recent years. With the acquisition of the Lazada Group in 2016, Alibaba made progress in Southeast Asia. However, it also wants to expand into markets where Amazon holds a dominant position: Europe and North America. Here, Europe is a priority, but the company has found this difficult despite low fees. While several small companies have joined the AliExpress platform, larger names have been slow to follow suit. In the meantime, Alibaba has hoped to begin its US wholesale expansion. On Alibaba.com, about one-third of buyers are based in the US in 2019, but 95 percent of sellers on the platform are still Chinese.

In 2019, Alibaba still generated more than 80 percent of its total revenue from its core commerce business. Its digital media and entertainment business, an area where the company hopes to compete with rivals like Tencent and Baidu, has been described by some analysts as a "money pit."

management

"Jack stood out too much during the era of China's party and state leader Xi Jinping," reported Beijing manager Jörg Wuttke, former head of the European Chamber of Commerce in China. "At the G20 summit in Hangzhou in 2016, he seemed to be holding court, not Xi... Jack had to scale back his public appearances." Announcing his plans to step down in 2018, Ma said: "I still have many dreams to pursue. Those who know me know that I don't like to sit idle. The world is big, and I'm still young, so I want to try new things." He officially stepped down from his position as executive chairman in September 2019, but criticized Chinese regulators in a speech in Shanghai at the end of October 2020. Afterward, he mysteriously disappeared for almost three months. In mid-January 2021, the otherwise public-loving billionaire resurfaced and announced his intention to devote himself even more to charitable causes than before: "I have been learning and reflecting together with my colleagues over the past few days. We are now even more determined to dedicate ourselves to education and charity."

Daniel Zhang, a founding member of the leading Chinese technology group Alibaba, born in Shanghai in 1972, has been Alibaba's Chairman since 2019. According to Spiegel Online: "Daniel is a quiet top manager... He prefers privacy; his style is similar to that of other managers who emphasize understatement. Without that, you can't do these days." Zhang is a different type than company founder Jack Ma, the self-made man. He started out as an accountant but also came up with the idea for "Singles' Day," on which Alibaba generates $25 billion in annual sales.

Business Units

Digital Media and Entertainment

Youku: Alibaba has been the majority shareholder of the third largest online streaming platform in China since 2016, after Tencent Video (Tencent: 4th place in the IfM ranking) and iQiyi (Baidu: 19th place in the IfM ranking).

Alibaba PicturesSince its first Hollywood investment in 2015, Alibaba Pictures, founded in 2014 following Alibaba's acquisition of ChinaVision Media, has invested in a number of major productions, including the Oscar-winning film "Green Book." In 2016, Alibaba announced a partnership with Amblin Partners, Steven Spielberg's US film production company, to cooperate in the marketing, distribution, and merchandising of Amblin films in China. The agreement also gives Alibaba the option to co-finance Amblin's global productions. According to Alibaba Group's proprietary news service, Alizila, Alibaba Pictures co-financed 23 productions in 2019. Alibaba Pictures has continued to invest in film and entertainment, acquiring a majority stake in variety show producer Tianjin Yinhekuyu in March 2020. However, the company has experienced persistent losses in recent years due to a generally weak environment for the Chinese entertainment industry.

Also: Alibaba is Lingxigames Developers and distributors of mobile games and operates with Damai online ticketing.

E-commerce (selection)

Having secured Alibaba's dominance in the Chinese e-commerce market, the group has increasingly focused on expanding its international business in recent years. With the acquisition of the Lazada Group in 2016, Alibaba made significant progress in Southeast Asia. However, it also wants to expand into markets where Amazon holds a dominant position, not least in Europe and North America. Here, Europe is a priority, but the company has found this difficult despite low fees. While a larger number of small businesses have joined the AliExpress platform, larger names have been slow to follow suit. In the meantime, Alibaba has hoped to begin its US wholesale expansion. On Alibaba.com, about one-third of buyers are based in the US in 2019, but 95 percent of sellers on the platform are still Chinese.

Taobao: Alibaba's FlagshipTaobao has been an online shopping website since May 2003. Taobao allows retailers and businesses to set up online stores and then sell directly to customers. It facilitates online payment and logistics and guarantees delivery within 24 hours. The site is the world's largest e-commerce site with 600 million users and also offers live streaming through its live channel to promote sales.

Taobao Mall, or Tmall, is Alibaba's business-to-consumer website, launched in April 2008. Alibaba built the site to separate the e-commerce offerings of large retailers and brand owners from those of individual sellers and small businesses. In 2012, its Chinese name was changed to "Tian Mao" ("Sky Cat"). Tmall is China's largest B2C service, holding a 60 percent share of the domestic B2C market in 2018. Electric vehicle manufacturer Tesla also opened its first Chinese online flagship store here on the Tmall platform in April 2020.

AliExpress is the group's online retailer, offering products to international online shoppers. Since its launch in 2010, AliExpress has sought to attract companies and brands from abroad—with limited success. AliExpress has actively approached European brands to bring them onto the platform and has offered to waive monthly fees for brands and companies in an attempt to break Amazon's dominance.

In April 2016, Alibaba acquired a majority stake in the Lazada Group, the Southeast Asian e-commerce company founded by Maximilian Bittner in 2012 with the Berlin-based venture capital firm Rocket Internet. The Lazada Group already had a strong presence in six Southeast Asian countries from its headquarters in Singapore. In March 2018, Alibaba increased its stake in the company with an additional investment of $2 billion and replaced Bittner with Lucy Peng. By September 2019, Lazada was the leading e-commerce service in Southeast Asia, with over 50 million active shoppers on its platform.

Founded in 2014, Ant Financial Services Group (Hangzhou) operates Alibaba's mobile payment system Alipay, launched in 2004, which many credit (along with WeChat) for the completely new online payment system and cashless online and offline consumption. This system also includes an escrow system in which money is held until both parties to a transaction confirm payment. Ant Financial now also enables other financial services such as loans, credit cards, and credit scores.

Cloud computing and innovation

Alibaba Cloud Founded in September 2009 to celebrate the group's 10th anniversary, Alibaba Cloud is a cloud computing platform that provides e-commerce and data services for online businesses in China and around the world. The company now operates in more than 200 countries and ranked third in global cloud service market share in 2019. In January 2017, Alibaba Cloud partnered with the International Olympic Committee to become the global cloud service provider for the Olympic Games. Alibaba Cloud has also established research centers around the world, including in Singapore, the United States (Silicon Valley), and Dubai.

Current developments

Alibaba and its Chinese competitor Tencent (ranked 4th in the IfM ranking) are both likely to be forced to lay off thousands of employees, as reported in the tech press in March 2022. The reason: slow growth due to the coronavirus pandemic. According to Reuters, Alibaba could have to lay off 39,000 employees, or 15% of its total workforce. On Weibo, the Chinese Twitter account (owned by Sina Corporation, ranked 95th in the IfM ranking), there is even talk of 30%. The share price also halved from the end of 2020 to the end of 2021. In addition, China recorded its lowest economic growth in four decades at 2.3 percent, according to the latest data from the National Bureau of Statistics.