Alibaba Group

Alibaba Group is a Chinese public company operating in the field of online commerce , owner of the web portals Taobao.com , Tmall, Alibaba.com, AliExpress and several others. The main activities are B2B trading operations between companies and online retail trade; also owns one of the world's largest cloud computing infrastructures and has assets in the media and entertainment industry. The company operates primarily in China . Officially incorporated in the Cayman Islands , headquartered in Hangzhou.

History

Founded by Ma Yun, known as Jack Ma , in 1999 with 17 associates in the city of Hangzhou , where the Internet site Alibaba.com was registered . From the very beginning, Alibaba was seen as a platform for selling goods for small and medium-sized businesses. On June 28, 1999, Alibaba Group was registered in the Cayman Islands. At the end of the same year, it received investments from the American investment bank Goldman Sachs ($5 million) and the Japanese company SoftBank ($20 million). By 2002, the site began to make a profit ( commissions from transactions began to exceed the costs of developing infrastructure), and in 2003 the company acquired new structures: the Taobao site for trading goods and services between consumers ( C2C ), the Alipay payment system and others. Alibaba Group has sought to capture as much of the Chinese e-commerce market as possible since the American company eBay announced its entry into the market in 2003 ; One of the measures to increase competitiveness was free registration on sites.

In 2005, Yahoo! acquired 43% of the company's shares, but on September 18, 2012, Alibaba Group completed the buyback of 20% of its own shares owned by Yahoo! In November 2007, the shares were listed on the Hong Kong Stock Exchange , but in 2012 the company delisted them; On November 26, 2019, the company's shares were relisted on the Hong Kong Stock Exchange.

In 2008, Taobao launched a separate website, Taobao Mall (Tmall.com), where companies ranging from small businesses to multinational corporations act as sellers. In 2011, Taobao was split into two separate entities within the Alibaba Group, Taobao Marketplace and Tmall. In 2009, a subsidiary of Alibaba Cloud was founded to provide cloud computing for both its own sites and third-party clients. As of March 31, 2011, the number of registered users of sites in the Alibaba Group system exceeded 65 million from 240 countries and regions.

According to reports from the Chinese company iResearch , as of 2006, it is the largest Chinese company in the B2B marketplace market (in terms of the number of registered users and market share by profit). It operates in international markets, in particular, in 2012, Alibaba.com entered the Russian market by concluding a partnership agreement with the Qiwi payment system, a year later, in 2013, it connected to the WebMoney Transfer system, and in 2014 connected Sberbank wallets and terminals of the same name through Yandex.Money.

In 2013, Alibaba Group planned to open physical stores in Wanda Plaza (shopping malls owned by Wanda Group), but these plans were soon abandoned. In May 2013, the logistics company Cainiao was launched together with eight other companies . At the beginning of 2014, a 25 percent stake in the Chinese department store chain Intime Retail was purchased. In October 2014, the Alipay payment system was reorganized into Ant Financial, which in addition to Alipay also includes Alipay Wallet (electronic wallet), Yu'e Bao (fund with 570 billion yuan under management), Zhao Cai Bao (financial services platform) , Ant Micro (providing microfinance ) and MYBank (private bank).

In September 2014, Alibaba Group's initial public offering on the New York Stock Exchange raised $21.8 billion, later increasing to $25 billion, making it the largest IPO in history. As of the date of its historic initial public offering (IPO) on September 19, 2014, Alibaba's market value was $231 billion.

On January 26, 2018, against the background of rising share prices on the New York Stock Exchange (the mark of $198 per share was exceeded), the company's capitalization reached $500 billion. In January 2018, Alibaba became the second Asian company to surpass US$500 billion valuation after its competitor Tencent.

In the spring of 2018 , Alibaba acquired the Chinese online food delivery service Eleme. The transaction amount was $9.5 billion.

In April 2018, the company announced a project to develop unmanned vehicles that meet the fourth level of driving autonomy. In order to support the development of this area, the Chinese authorities legislatively regulated the process and conditions for testing unmanned vehicles in the country. On August 20, 2018, the start of testing of a voice recognition system based on artificial intelligence, capable of working in both online and offline modes, was announced.

On February 14, 2019, the financial division of Alibaba Group, Ant Financial, reached an agreement to purchase the British company WorldFirst. The purchase cost the Chinese company only $700 million, despite the fact that Ant Financial itself was valued at $150 billion. Alibaba Group tried to enter Western markets back in 2017, but then the company was negotiating with the American MoneyGram, but the US authorities spoke out sharply against this transactions.

In the Forbes Global 2000 list of the world's largest public companies for 2019, it was ranked 59th, including 7th by market capitalization, 54th by net profit, 239th by assets and 170th by turnover; of the Chinese companies in this list took 12th place; Sales volume in 2019 on Alibaba group portals amounted to about 6 trillion yuan ($900 billion). As of 2020, Alibaba was the sixth largest global brand.

In October 2020, Jack Ma sharply criticized China's financial system and advocated its reform. The Chinese authorities did not like this behavior of the billionaire and they came into conflict with Alibaba Group: in early November 2020, the IPO of Ant Group, which could have become the largest in Chinese history, failed; in April 2021, the State Administration for Market Regulation of the People's Republic of China imposed an administrative fine on Alibaba Group for monopolistic behavior in the market in the amount of 18.228 billion yuan (about 2.79 billion US dollars). During the year of conflict with the authorities, Alibaba's market capitalization fell by $344 billion.

As of 2022, the Alibaba brand ($137 billion) was the second most valuable brand in the country. In March 2023, Alibaba Group announced plans to split its business into six independent companies - Alibaba Cloud Intelligence Group (cloud services), Taobao and Tmall Group (online trading in China), International Digital Commerce (international online trading), Local Life (food delivery), Cainiao (logistics) and Dawen Entertainment (digital media and entertainment). After the announcement of the division, Alibaba shares rose in price by 16% (more than $30 billion).

On April 11, 2023, Alibaba introduced its artificial intelligence technology called Tongyi Qianwen. The development became the basis for the chatbot, and was also integrated into all the company's applications. On August 3, 2023, access to the company’s AI models was provided to everyone. Alibaba has opened the source code of the Qwen-7B models with 7 billion parameters and Qwen-7B-Chat, designed for creating interactive chat bots. On August 26, 2023, the Qwen Large Vision Language Model (Qwen-VL) and Qwen-VL-Chat were introduced, with advanced capabilities for image interpretation and natural language content generation.

In October 2023, at its annual conference in Hangzhou, the company presented a new version of its AI model, Tongyi Qianwen 2.0, based on hundreds of billions of parameters.

Due to its activities in Russia against the backdrop of the Russian-Ukrainian war, the Ukrainian National Agency for the Prevention of Corruption included the company among the international sponsors of the war.

Group structure

Alibaba Group includes about 700 subsidiaries registered in China and 520 registered in other countries. Alibaba Group Holding is directly subordinate to several holding companies registered in offshore zones, the main ones being Taobao Holding Limited (Cayman Islands) and Alibaba Investment Limited (British Virgin Islands). Taobao China Holding Limited is registered in Hong Kong and is subordinate to Taobao Holding Limited, and is the holding company for the Taobao Marketplace and Tmall portals.

Largest subsidiaries:

Retail trade in China

• Taobao is an online retail marketplace, online store and online auction (all products offered can be purchased through AliExpress).
• Tmall is a platform for selling original goods from official brands; it has been operating in Russia since September 2017 at tmall.aliexpress.com.
• Freshippo is a chain of grocery stores that allows you to both order online and buy in physical stores.
• Sun Art Retail Group is a chain of hypermarkets and supermarkets.
• Lianhua Supermarket is a chain of hypermarkets and supermarkets.
• Suning is a chain of household appliances and electronics stores.
• Intime is a chain of department stores.
• Red Star Macalline Group is a chain of furniture and home goods stores.

Retail trade in other countries

• AliExpress.com is an online store selling goods at retail and small wholesale. Product information is automatically translated into different languages. The peculiarity of the service is that the seller receives money only after delivery of the goods.
• Lazada Group is a shopping platform operating in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
• Trendyol is a trading platform in Turkey.
• Daraz is a trading platform operating in Pakistan, Bangladesh, Myanmar, Nepal and Sri Lanka.
• Choice is a trading platform in South Korea.

Wholesale trade in China

• 1688.com is an online platform for wholesale trade.
• Lingshoutong is an online platform for wholesale trade and delivery of perishable goods.

International wholesale

• Alibaba.com (Alibaba China, Alibaba International) is a trading platform for organizations (B2B), its services are used by buyers in 190 countries.

Logistics

• Cainiao is a Chinese logistics company, Alibaba Group's share is 63%, accounting for about 4% of the group's revenue.
• STO Express is a Chinese logistics company.
• Fengniao Logistics is a Chinese logistics company.
• CC Fresh is a Chinese cold storage and refrigerated transport operator.
• YTO Express is a Chinese logistics company.

Consumer services

• Ele.me is an online food delivery service.
• Koubei is a portal with information about restaurants.

Cloud technologies

• Cloud Intelligence Group - cloud services.
• Alibaba Cloud Computing is a cloud computing service for online businesses.

Mass media and entertainment

• Alibaba Pictures (Alibaba Pictures Group) is a Chinese film company (51%).
• Youku is the third largest online video platform in China.
• AliMusic is the largest online music platform in China.
• Damai - online ticket sales (purchased in 2017).
• UC Browser is a browser for mobile devices.
• Amap - electronic maps and information about the traffic situation.
• DingTalk is a platform for organizing conference calls.
• Juhuasuan is a platform for selling discounted products.
• Tmall Genie is an interactive speaker system.
• The South China Morning Post is a Hong Kong daily newspaper and its associated website.

Tourism

• Fliggy is an online travel services platform .

Financial services

• Ant Financial is a financial company that includes Alipay, an online electronic payment platform (30%).
• MyBank - online banking.

Information Services

• Tongyi Quianwen is an artificial intelligence chatbot.

Production

• Xunxi Digital Technology Company - production and logistics management for SMEs
• Alibaba Group also produces logistics robots.

Activities

Trading platforms Taobao.com and Tmall, operating in China, provide about 2/3 of the company's revenue. In addition, Alibaba Group owns the e-commerce platform Lazada , which operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam ; in 2019, the Turkish platform Trendyol and the Daraz platform, operating in Pakistan and Bangladesh, were purchased ; these platforms account for about 5% of revenue. Together with wholesale international trading platforms (Alibaba.com, 1688.com) and logistics services, e-commerce accounts for 86% of revenue.

Other sources of income include cloud computing (7% of revenue, the third largest infrastructure in the world and the largest infrastructure in the Asia-Pacific region), media and entertainment assets (6%), investments in innovative technologies and other assets (1%).

For the financial year ending March 31, 2019, 654 million clients became consumers of the company’s services, the total amount of transactions on the company’s platforms in China amounted to 5.727 trillion yuan ($853 billion), of which on Taobao.com - 3.115 trillion yuan, on Tmall - 2.612 trillion yuan; 70% of payments for these transactions went through Alipay's own electronic payment system. In addition to the common payment system, the group’s subsidiaries use a single software, as well as databases of goods and enterprises sorted by region and industry.

Owners and management

Alibaba Group shares are listed on the New York Stock Exchange; at the end of 2019, their listing on the Hong Kong Stock Exchange was resumed. The total market value of shares (market capitalization) at the beginning of 2020 exceeded $600 billion. The largest shareholder is the Japanese company SoftBank (25.9% as of mid-2019).

Largest shareholders:

• SoftBank is a Japanese investment company that invested $20 million in Alibaba in 2000; in 2016 and 2019, it sold part of its stake, the value of which by this time exceeded $100 billion (25.9%).
• Joseph Tsai - co-founder and vice president of the company; Taiwanese-Canadian businessman, Forbes estimates his fortune at $12.1 billion (11.9%).
• Altaba - the company existed from 2017 to 2019 and owned shares in Alibaba Group (11.13%) and Yahoo! Japan, which were previously owned by Yahoo! Inc.; the shares were sold and the company ceased to exist in October 2019.
• the remaining shares are held by various investment funds, such as BlackRock (3%), Price T. Rowe Associates, Inc. (2.68%), The Vanguard Group, Inc. (1.89%), Baillie Gifford & Co (1.86%), State Street Global Advisors (1.12%), HSBC Global Asset Management (UK) Ltd (1.03%), Capital Research & Management Co ( 1.02%), Temasek Holdings (0.98%), Invesco (0.95%).

Manual:

• Jack Yun Ma - founder, until 2013 he was chairman and chief executive officer, until September 2020 - chairman of the board of directors; also a member of the board of directors of SoftBank, a member of the board of trustees of the World Economic Forum, and chairman of the Zhejiang Provincial Chamber of Commerce and the China Entrepreneurs Club.
• Maggie Wu is  the Chairman of the Board of Directors and was the Chief Financial Officer until 2020.
• Joseph C. Tsai - co-founder and vice chairman, until 2013 was chief financial officer; until 1999 he worked for the Hong Kong investment company Investor AB (owned by the Swedish Wallenberg family).
• Daniel Yong Zhang - Chief Executive Officer since May 2015, member of the Board of Directors since 2014, with the company since 2007; Before that, he worked at the auditing firm PricewaterhouseCoopers and was the CFO of game developer Shanda Interactive Entertainment.
• Michael Evans (J. Michael Evans) - President since August 2015, member of the Board of Directors since 2014; before that he worked at The Goldman Sachs Group, in particular since 2008 he was vice chairman.

On December 6, 2021, Alibaba announced future leadership changes. On April 1, 2022, Toby Xu will become the company's new chief financial officer, replacing Maggie Wu.

Headquarters

The headquarters is located in Hangzhou, in a 260 thousand m² complex, which was completed in 2013 (969 West Wen Yi Road, Yu Hang District, Hangzhou 311121, People's Republic of China). The formal headquarters is in Hong Kong (Alibaba Group Services Limited, 26/F Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong), with its registered office in the Cayman Islands Trident Trust Company (Cayman) Limited, Fourth Floor, One Capital Place, PO Box 847, George Town, Grand Cayman, Cayman Islands. The US office is located in New York (1180 Avenue of the Americas, Suite 210, New York, New York 10036).