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Profile: Alibaba Group Holding Ltd (BABA.N)

BABA.N on New York Stock Exchange

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17 Jun 2019
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Alibaba Group Holding Limited, incorporated on June 28, 1999, is a holding company. Through its subsidiaries, the Company is principally engaged in online and mobile commerce through offering of products, services and technology that enable merchants, brands and other businesses to transform the way they market, sell and operate in the People's Republic of China (China) and internationally. The Company’s businesses consist of core commerce, cloud computing, mobile media and entertainment, and other innovation initiatives. Through investee affiliates, it also participates in the logistics and local services sectors. Retail commerce in China operated by the Company includes the China online commerce destination (Taobao Marketplace); the China third-party platform for brands and retailers (Tmall), and the sales and marketing platform for flash sales (Juhuasuan). Wholesale commerce in China operated by the Company includes the China domestic wholesale marketplace (1688.com). International and cross-border commerce operated by the Company includes the global marketplace targeting consumers from around the world to buy directly from manufacturers and distributors in China (AliExpress); a platform within the Tmall for overseas brands and retailers to reach Chinese consumers without the need for physical operations in China (Tmall Global), and the wholesale marketplace for global trade (Alibaba.com).

The Company is a provider of public cloud services, which offers a complete suite of cloud services, including elastic computing, database, storage and content delivery network, large scale computing, security and management and application services, to third-party customers (Alibaba Cloud Computing). The Company also operates business in mobile media and entertainment through over three distribution platforms, including UCWeb mobile media, game publishing and multi-screen entertainment, as well as content creation and production companies in film, music and sports. The Company also participates in the logistics and local services sectors through investments in Cainiao Smart Logistics Network Limited (Cainiao Network) and Koubei Holding Limited (Koubei), respectively. The Company makes available online payment processing services (Payment Services) on its marketplaces through an arrangement with Alipay.com Co., Ltd. (Alipay). Tmall Global is its platform within Tmall for overseas brands and retailers to reach Chinese consumers without the need for physical operations in China. Its media and entertainment-related businesses, including over-the-top television (TV) services, music, sports and games, provide a platform on which users may discover and consume content and engage and interact with each other.

The Company's YunOS is a cloud-based mobile operating system for smartphones, Internet of Things devices, set-top boxes, smart televisions and smart cars, among others. YunOS provides the connectivity between cloud-based applications and hardware devices, with a focus on the data needs of users. Its AutoNavi is a provider of digital map, navigation and location-based services in China. Its DingTalk is an enterprise communications application that provides support for text, voice and video communication, work flow management and collaboration among team members and enterprises of various sizes. With a built-in enterprise directory, users can initiate text chats or voice and video conference calls, as well as secured group chats with members of their organization. DingTalk unifies the tasks of critical communication and collaboration in the work place. Its Alibaba Health is a vehicle to bring solutions to the healthcare industry. Alipay, a subsidiary of Ant Financial Services, provides payment and escrow services for transactions on Taobao Marketplace, Tmall, 1688.com, AliExpress and certain of its other platforms. Alipay also offers a mobile application, Alipay Wallet, which further facilitates mobile commerce and other consumer services and digital transactions by making payment accessible and convenient through a mobile device. The Company is engaged in the online-to-offline (O2O), local services business involving restaurants, food delivery, movie ticketing and retail stores, among others.

The Company's cloud computing platform, called Apsara, is a general purpose distributed computing platform built with technology that enables server clusters to perform with computing power. Apsara offers a suite of cloud services, including elastic computing, database storage and services, and large-scale data processing services through Web-based application program interface (API). The technology underlying AliCDN, its content delivery network, accelerates the loading of product photographs on Web pages delivered to users. Its data science technology serves various types of data-intensive computational needs, including deep learning, high-volume batch processing and multi-variable and multi-dimensional real-time analytics. The data mining and transaction, payment and behavioral data science capabilities are used in various applications, such as search and online marketing on its marketplaces. OceanBase, its distributed relational database management system, supports transaction processing on its marketplaces. Its standard product unit database (SPU database), is built on the amount of items listed on Taobao Marketplace and Tmall.

Core Commerce

The Company's core commerce business comprises marketplaces operating in over three areas, including retail commerce in China; wholesale commerce in China, and international and cross-border commerce. Its retail commerce business in China comprises Taobao Marketplace, Tmall and Juhuasuan, collectively its China retail marketplaces, and Rural Taobao and merchant services. Taobao Marketplace provides a traffic funnel that directs users to the various marketplaces, channels and features within its China retail marketplaces. Taobao Marketplace is also the entry point to verticals, such as online travel booking, operated under the Alitrip name, and second-hand auctions, operated under the Xianyu name, both of which can also be accessed through their own independent mobile application. Alitrip offers a selection of domestic and international airline tickets, train and bus tickets, hotel bookings, vacation packages and tourist attractions through online travel agencies and direct travel service providers, such as airlines and hotels. Xianyu users trade second-hand items using the Xianyu mobile application, which offers location-based information about products and merchant rating reviews.

Merchants on Taobao Marketplace are primarily individuals and small businesses. The escrow payment services provided by Alipay are free of charge to consumers and merchants unless payment is funded through a credit card, in which case Alipay charges a fee to the merchant based on the related bank fees charged to Alipay. Taobao Marketplace merchants can purchase pay-for-performance (P4P) and display marketing services to direct traffic to their storefronts. In addition, merchants can acquire additional traffic from third-party marketing affiliates. Taobao Marketplace merchants can also pay for storefront software that help to upgrade, decorate and manage their online storefronts. Brands and retailers operate their own stores on the Tmall platform with brand identities and look and feel, accompanied by full control over their own branding and merchandising. Juhuasuan is a sales and marketing platform for flash sales where Tmall and Taobao Marketplace merchants can acquire new customers and raise brand awareness through special discounts and promotional events. Juhuasuan offers selected branded and private label products, products made to custom specifications, as well as services, such as group travel packages. Juhuasuan is an additional avenue for Taobao Marketplace or Tmall merchants to feature their products and to generate sales. Transactions from traffic originated on Juhuasuan are completed on the merchants' storefronts on Taobao Marketplace or Tmall. Merchants primarily pay a commission based on a pre-determined percentage of transaction value generated from Juhuasuan, which varies by product category, and, under certain circumstances, a placement fee for promotional slots for a specified period.

The Company's Rural Taobao program helps Chinese rural villages to create a production economy by enabling village residents to sell items, such as agricultural products, directly to urban consumers. Through its Rural Taobao program, it is developing a two-way distribution infrastructure to connect commerce between cities and rural areas in China. Its merchant services include Customer relationship management, Inventory and fulfillment management, Storefront management, Mobile engagement, Data insight, Communication, Productivity management, Taobao Services Platform and Financing. The Company's Wholesale Commerce in China includes 1688.com, which is its online wholesale marketplace that connects buyers and sellers in China trading in general merchandise, apparel, electronics, raw materials, industrial components, and agricultural and chemical products, among others. Sellers may purchase a China TrustPass membership for an annual subscription fee to host premium storefronts with access to data-analytics applications and upgraded storefront management tools.

The Company's International and Cross-border Commerce includes AliExpress, Tmall Global, Alibaba.com global trade marketplace and Lazada. AliExpress is a global marketplace targeting consumers from around the world to buy directly from manufacturers and distributors in China. In addition to the global English-language site, AliExpress operates over 15 local language sites, including Russian, Spanish and French. Consumers can access the marketplace through its Websites or the AliExpress application. AliExpress caters to Russia, the United States, Spain, Brazil, France and the United Kingdom. Through Tmall Global, an extension of Tmall, it addresses the increasing Chinese consumer demand for international products and brands. Tmall Global is the platform for overseas brands and retailers to reach Chinese consumers and build brand awareness in China without the need for physical operations in China. Alibaba.com is an English language wholesale marketplace for global trade. Sellers on Alibaba.com may pay for an annual Gold Supplier membership to host a premium storefront with product listings on the marketplace.

The Company, through OneTouch, an Internet-based integrated services platform, offers members of Alibaba.com and other small and medium enterprises (SMEs) services relating to import/export transactions, including customs clearance, Value Added Tax (VAT) refund, trade financing and logistics. Lazada operates e-commerce platforms in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, with local language Websites and mobile applications in each of six markets. Lazada offers third-party brands and merchants a marketplace solution in these six countries through a retail channel. Lazada also sells products owned by its retail operations. It has developed its own logistics infrastructure with warehouses and a last-mile delivery fleet to offer delivery to its customers.

Cloud Computing

Alibaba Cloud offers a complete suite of cloud services, including elastic computing, database, storage and content delivery network (CDN), large scale computing, security and management and application services. Alibaba Cloud offers products, which includes security and middleware products, large-scale computing services and analytic capabilities provided by its data platform. These products enable customers to build IT infrastructure online without having to work on-premise.

Mobile Media and Entertainment

The Company has developed business in mobile media and entertainment through approximately three distribution platforms, UCWeb mobile media, game publishing and multi-screen entertainment, and content creation and production companies in film, music and sports. UCWeb operates UC Browser. UCWeb also provides mobile value-added services to users, including news feeds, mobile Web navigation and mobile search. It operates a game publishing platform for Android-based mobile games that also serves as an online community and media platform for gamers. It cooperates with upstream and downstream players across the game industry value chain, as a partner, exclusive licensee and developer of mobile games. Through licensed operators, it also offers over-the-top television services, such as the delivery of a variety of video content over the Internet through set-top boxes developed by the Company and set-top boxes and smart televisions developed by third parties, of which some are powered by YunOS, its operating system.

Content Creation and Production

Alibaba Pictures is the Company’s equity method investee company that produces and invests in movies and television programs. In addition to content production, Alibaba Pictures also promotes and distributes films. It also operates an online ticketing platform and a consumer to business (C2B) financing platform for entertainment projects and merchandising. It operates Xiami, which offers music streaming services through Websites and mobile applications. It also operates online music platform Alibaba Planet that connects fans, artists and other music industry participants. Its Alibaba Sports Group is engaged in the development and operation of sports IP, sporting events, e-sports contests, sporting venues, sports merchandise and acquisition of selected media rights, leveraging its expertise in e-commerce and its various entertainment distribution platforms.

Monetization Platforms and Systems

Alimama is the Company’s marketing technology platform that provides the publisher-side serving and demand-side functionalities for merchants and brands to place various marketing display formats on its marketplaces and other third-party properties. The platform supports P4P marketing based on keyword search rankings or display marketing in fixed positions that are bid through auctions, as well as cost-per-thousand impression-based (CPM) marketing formats through the display of photos and graphics. The Alimama technology platform supports marketing delivered through personal computers and mobile devices. Under Alimama's bidding system, marketers may set a higher or lower bid price for mobile marketing than the bid price for marketing on personal computers. Alimama also has an affiliate marketing program to place marketing displays on third-party Websites and mobile applications, thereby enabling marketers, if they so choose, to extend their marketing and promotional reach to properties and users beyond its own marketplaces. Alimama operates the Taobao Ad Network and Exchange, or TANX, a real-time bidding online marketing exchanges in China. TANX helps publishers to monetize their media inventories both on Web properties and mobile applications.

The Company's mobile search engine, Shenma, monetizes through a keyword bidding system that enables marketers to reach users searching for information related to their products or services. It engages third-party distributors to sell some of its mobile marketing services to marketers. UC Browser monetizes primarily through time-based display marketing where marketers place icons that link to their Webpage or applications in UC Browser. Its news feed feature UC Headline enables marketers to place marketing messages in news feed on cost-per-click (CPC) basis or impressions on time basis. Its mobile marketing platform enables marketers to launch targeted marketing for applications, games, Web pages and services on mobile media, including UC Browser, UC Headline and third-party media partners. Its Youku Tudou monetizes primarily through brand advertising. Its online advertising services include in-video, display, sponsorship and other forms of advertisements. In-video advertisements appear at certain times during the playback of a video. These video advertisements can be pre-roll, post-roll, mid-roll or pause advertisements.

The Company competes with Tencent and Baidu.

Company Address

Alibaba Group Holding Ltd

699 Wang Shang Road, Binjiang Di
HANGZHOU   ZHJ   310052
P: +86571.85022088
F: +86571.89815505

Company Web Links