Alibaba Group Holding Limited is a Cayman Islands holding company established under the Companies Law of the Cayman Islands (as amended) on June 28, 1999, and the company conduct its business in China through its subsidiaries and variable interest entities. The company's ADSs are listed on the NYSE under the symbol "BABA."

The company's significant subsidiaries, as that term is defined under Section 1-02 of Regulation S-X under the Securities Act, include the following entities:

• Taobao Holding Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands, which is its wholly-owned subsidiary and the indirect holding company of the PRC subsidiaries relating to Taobao Marketplace and Tmall.
• Taobao China Holding Limited, a Hong Kong limited liability company, which is the direct wholly-owned subsidiary of Taobao Holding Limited and the direct holding company of the PRC subsidiaries relating to Taobao Marketplace and Tmall and operating entity for the overseas business of Taobao Marketplace and Tmall Global.
• Taobao (China) Software Co., Ltd., a limited liability company incorporated under the laws of the PRC, which is an indirect subsidiary of Taobao Holding Limited and a wholly-foreign owned enterprise, and provides software and technology services for Taobao Marketplace.
• Zhejiang Tmall Technology Co., Ltd., a limited liability company incorporated under the laws of the PRC, which is an indirect subsidiary of Taobao Holding Limited and a wholly-foreign owned enterprise, and provides software and technology services for Tmall.
• Alibaba.com Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands, which is its wholly-owned subsidiary and the indirect holding company of the PRC subsidiaries relating to Alibaba.com, 1688.com and AliExpress.
• Alibaba.com Investment Holding Limited, a company incorporated with limited liability under the laws of the British Virgin Islands, which is the direct wholly-owned subsidiary of Alibaba.com Limited and a lower level holding company of the PRC subsidiaries relating to Alibaba.com, 1688.com and AliExpress.
• Alibaba Investment Limited, a company incorporated with limited liability under the laws of the British Virgin Islands, which is its wholly-owned subsidiary and the principal holding company for its strategic investments, including Youku Tudou.

The principal executive offices of its main operations are located at 969 West Wen Yi Road, Yu Hang District, Hangzhou 311121, People's Republic of China. The company's telephone number at this address is +86-571-8502-2077. The company's registered office in the Cayman Islands is located at the offices of Trident Trust Company (Cayman) Limited, Fourth Floor, One Capital Place, P.O. Box 847, George Town, Grand Cayman, Cayman Islands. The company's agent for service of process in the United States is Corporation Service Company located at 1180 Avenue of the Americas, Suite 210, New York, New York 10036. The company's corporate website is www.alibabagroup.com.

Alibaba Group has a demonstrated track record of successful organic business creation. In addition to organic growth, Alibaba Group has made, or have entered into agreements to make strategic investments, acquisitions and alliances that are intended to increase its product and service offerings and expand its capabilities. See "Item 5. Operating and Financial Review and Prospects — A. Operating Results — Recent Investment, Acquisition and Strategic Alliance Activities" for more information.

Share Repurchase Program

On August 12, 2015, the company announced the implementation of a share repurchase program in an aggregate amount of up to US$4.0 billion over a period of two years, or the 2015 Share Repurchase Program. Alibaba Group has repurchased ADSs representing its ordinary shares on the open market under purchase plans adopted to implement the 2015 Share Repurchase Program. In addition, Jack Ma, its executive chairman, and Joe Tsai, its executive vice chairman, have jointly entered into its plans as affiliated purchasers. On May 18, 2017, the company announced the adoption of a new share repurchase program in an aggregate amount of up to US$6.0 billion over a period of two years, or the 2017 Share Repurchase Program. The new program replaced, and cancelled the remaining amount under, the 2015 Share Repurchase Program. See "Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers."

In June 2016, the company also repurchased shares from SoftBank in a privately negotiated transaction. See "Item 7. Major Shareholders and Related Party Transactions — B. Related Party Transactions — Transactions and Agreements with SoftBank and Yahoo — The company's Repurchase of Ordinary Shares from Yahoo and SoftBank."

Company Overview

To fulfill its mission "to make it easy to do business anywhere," the company enable businesses to transform the way they market, sell and operate. The company provide the fundamental technology infrastructure and marketing reach to help merchants, brands and other businesses to leverage the power of the Internet to engage with their users and customers.

The company's businesses are comprised of core commerce, cloud computing, digital media and entertainment, and innovation initiatives and others. Through investee affiliates, Cainiao Network and Koubei, respectively, the company participate in the logistics and local services sectors. In addition, Alibaba Group has a profit sharing interest in Ant Financial Services, the financial services group that operates mainly through Alipay, the leading third-party online payment platform in China.

Core Commerce

Retail Commerce in China

Alibaba Group is the largest retail commerce company in the world in terms of GMV in the twelve months ended March 31, 2017, on the basis of publicly available comparable transaction value data for the most recent fiscal year.

The company operate Taobao Marketplace, China's largest mobile commerce destination, and Tmall, China's largest third-party platform for brands and retailers, in each case in terms of GMV in 2016, according to iResearch. Taobao Marketplace and Tmall (including Juhuasuan), which comprise its China retail marketplaces, generated a combined GMV of RMB3,767 billion (US$547 billion) in the twelve months ended March 31, 2017. There were 454 million annual active buyers on these marketplaces in the twelve months ended March 31, 2017. In March 2017, the various mobile apps that consumers use to access its China retail marketplaces had 507 million mobile MAUs.

In fiscal year 2017, the company generated 72% of its revenue from its retail commerce business in China. The revenue on its China retail marketplaces is generated from merchants through online marketing services, commissions on transactions and fees for other online services. In fiscal year 2017, the company generated 80% of this revenue through mobile devices.

Wholesale Commerce in China

The company operate a China wholesale marketplace, 1688.com, which matches wholesale buyers and sellers in categories such as general merchandise, apparels, electronics, raw materials, industrial components and agricultural and chemical products. A significant number of merchants on its China retail marketplaces source their inventory on 1688.com.

Retail Commerce — Cross-border and Global

The company operate AliExpress, its global retail marketplace with approximately 60 million annual active buyers from around the world in the twelve months ended March 31, 2017, buying directly from manufacturers and distributors in China. Tmall Global is its platform within Tmall for overseas brands and retailers to reach Chinese consumers without the need for physical operations in China. In April 2016, the company acquired a controlling stake in Lazada, which operates e-commerce platforms in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. In the twelve months ended March 31, 2017, Lazada had approximately 23 million annual active buyers.

Wholesale Commerce — Cross-border and Global

The company operate Alibaba.com, China's largest global online wholesale marketplace in 2016 by revenue, according to iResearch. As of March 31, 2017, buyers on Alibaba.com were located in over 200 countries and regions all over the world.

Cloud Computing

The company operate Alibaba Cloud Computing, or Alibaba Cloud, China's largest provider of public cloud services in 2016 by revenue, according to IDC. The technologies that power Alibaba Cloud grew out of its own need to operate the massive scale and complexity of its core commerce business. In 2009, the company founded Alibaba Cloud to make these technologies available to third-party customers. Alibaba Cloud offers a complete suite of cloud services, including elastic computing, database, storage and content delivery network (CDN), large scale computing, security, management and application services, big data analytics and a machine learning platform. As of March 31, 2017, Alibaba Cloud had approximately 874,000 paying customers.

Digital Media and Entertainment

Based on the strength of its relationship with consumers and its capability in leveraging commerce data that can be applied to serving the broader interests of consumers, Alibaba Group has established its digital media and entertainment business, mainly through acquisitions. In 2014, the company acquired UCWeb, which operates UC Browser, one of the top three mobile browsers in the world and the number one mobile browser in India and Indonesia by page view market share as of May 2017, according to StatCounter (all StatCounter data quoted in this annual report available at: http://gs.statcounter.com). UCWeb also provides mobile value-added services to users including news feeds, mobile web navigation and mobile search. Shenma ( GRAPHIC ), its mobile search business, is the second largest mobile search engine in China as of May 2017, according to StatCounter. In April 2016, the company acquired Youku Tudou, a leading multi-screen entertainment and media company in China, enabling users to search, view and share high-quality video content quickly and easily across multiple devices. Youku Tudou and UC Browser serve as the two key distribution platforms for its digital media and entertainment business. These businesses and its other media and entertainment-related businesses, including news feeds, mobile app distribution, music, sports, literature and games, provide a comprehensive digital media and entertainment ecosystem for users to discover and consume content and engage and interact with each other. In March 2017, its digital media and entertainment businesses had over 500 million mobile MAUs, including overseas users.

Innovation Initiatives and Others

The company continue to develop new service offerings to find new ways to meet the needs of its customers and expand the reach of its ecosystem. For example, YunOS is its cloud-based, data and service-oriented operating system that can be used on a wide range of smart devices, including automobiles, mobile phones, TVs and set-top boxes. AutoNavi provides digital map, navigation and real-time traffic information to users in China and serves as an open platform powering mobile apps and fundamental services in its ecosystem. DingTalk, its proprietary enterprise communication and collaboration platform, unifies the critical tasks of communication and collaboration in the work place, offering text, photo, voice and video communication, collaboration features and workflow management, such as convenient attendance recording and expense approval.

An ecosystem has developed around its platforms and businesses that consists of consumers, merchants, brands, other businesses, third-party service providers and strategic alliance partners. At the nexus of this ecosystem are its technology platform, its marketplace rules and the role the company play in connecting these participants to make it possible for them to discover, engage and transact with each other and manage their businesses anytime and anywhere. Much of its effort, time and energy is spent on initiatives that are for the greater good of the ecosystem and on balancing the interests of its participants. The company feel a strong responsibility for the continued development of the ecosystem and the company take ownership in this development. Accordingly, the company refer to this as "ecosystem." The company's ecosystem has strong self-reinforcing network effects benefitting its various participants, who are in turn invested in its ecosystem's growth and success.

The following chart sets forth its key businesses, selected major investee companies and cooperative partners:

GRAPHIC 

Entities that are not consolidated. The company's Strategies

The company believe that China and other markets will be deeply impacted by "Five New" trends of the future: New Retail, New Manufacturing, New Finance, New Technology and New Resources. Alibaba Group has oriented its existing and new product and service offerings to leverage Internet technology to create business models that can adapt to and benefit from future growth opportunities.

The consumer retail industry as a whole is experiencing a radical disruption driven by digital technology. The company believe "e-commerce" as the company know it will be replaced by New Retail where the distinction between online and offline retail becomes obsolete. The biggest trend the company see is the integration of offline and online retail for a new, reimagined retail experience, where the interactions among consumer traffic, inventory location and retail space are transformed by leveraging big data and mobile Internet technologies. For example, consumers can place orders via their mobile phones as they shop for and try out products in a physical retail store, aided by location-based recommendations. The company believe the company will play a critical role in this transformation by leveraging its consumer scale, data and technological capabilities to elevate the consumer experience and improve efficiency across the entire value chain.

The company aim to strengthen and expand its ecosystem in order to achieve long-term growth by:

• increasing active buyers and its wallet share through geographic expansion, new product and service categories, and improved consumer experience by leveraging its data capabilities to better identify, analyze and serve their needs through personalization across channels anytime and anywhere;
• expanding product and service offerings to consumers beyond physical goods, including digital entertainment, healthcare and local services;
• reinventing its platforms as go-to destinations for brands to lift awareness and affinity, manage and engage with customers, expand channels and innovate on products;
• creating value for merchants, brands, retail operators and other businesses in its ecosystem through online and offline integration, omni-channel marketing and distribution, retail space reinvention and operational efficiency improvement driven by big data and world-class technology;
• applying data and cloud computing technologies in everything the company do for its customers and for itself ; and
• continuing to be an innovator in products and technology as well as a disrupter of business models and existing industry value chains.

The company's long-term strategic goal is to serve two billion consumers around the world and support ten million businesses to operate profitably on its platforms. Alibaba Group has embarked on three key initiatives to achieve this strategic goal: globalization, rural expansion and big data and cloud computing.

Globalization

Cross-border commerce is the focus of its globalization initiative. The company aim to address each of the three pillars of cross-border commerce as follows:

• From the world to China. The company's China retail marketplaces provide the gateway for international brands, retailers and small businesses to gain access to Chinese consumers. Through Tmall Global, overseas brands and retailers can reach Chinese consumers and build brand awareness without the need for physical operations in China. Taobao Global further facilitates cross-border commerce by helping Taobao merchants to engage Chinese consumers with a rich variety of global products that they have sourced from suppliers outside of China.
• From China to the world. Through its Alibaba.com wholesale marketplace, the company facilitate global trade by connecting Chinese suppliers to importers, wholesalers and distributors across the world. On the retail front, AliExpress enables consumers worldwide to buy directly from manufacturers and distributors in China.
• From the world to the world. The company operate e-commerce platforms in Southeast Asia through Lazada. The company's long-term vision is to build a global commerce platform that is virtual and borderless, which the company refer to as the electronic World Trade Platform, or eWTP. Under eWTP, together with the Malaysia Digital Economy Corporation, the company launched a digital free trade zone, or e-hub, in Malaysia in May 2017, and the company plan to create more e-hubs through public-private partnerships in different countries. These e-hubs operate as one-stop service platforms which will allow small businesses in one country to sell to consumers in another, with fast customs clearance, accessible payment and financing services and access to efficient logistics. When connected together, these e-hubs will create a global network of e-roads that serves as the foundation of the eWTP. Through the power of the Internet, eWTP aims to build a more inclusive, free and innovative global trading platform for SMEs and consumers. To that end, Alibaba Group is investing in international talent and infrastructure, and expanding its presence in key markets around the world to attract and serve international customers.
• Rural Expansion

As of December 31, 2016, 590 million people in China reside in rural areas, according to the National Bureau of Statistics of China. Their access to goods and services is highly constrained by geographic and infrastructural limitations. The company aim to give rural residents greater access to a broader variety of higher quality goods and services through its Rural Taobao program. At the same time, the company help farmers earn more by selling agricultural products to urban consumers.

Big Data and Cloud Computing

The company believe its world is rapidly transitioning from an information technology, or IT, economy to a data technology, or DT, economy. Traditionally unstructured, undiscovered and underutilized data can now be activated and leveraged as a new fundamental energy source. From the development of personal computer, or PC, to mobile, to the Internet of Things, or IoT, the explosion of data is bringing about a new era of opportunity. In the future, the company believe that the Internet will play a fundamental role in social and commercial interactions, with cloud computing as a cost-saving public service, and data as a value-enhancing resource. The company will continue to implement its data strategy through the application of data intelligence, machine learning and deep learning technologies to several fields, including marketplace design, user interface, search, targeted marketing, logistics, platform security, location-based services and financial services, among others. The company will continue to invest in its cloud computing platform to support its own businesses and those of third parties.