ALI EXPRESS

COMPANY PROFILE

Alibaba Group Holding Yǒuxiàn Gōngsī) is a Chinese multinational conglomerate specializing

in e-commerce, retail, Internet, AI and technology. Founded in 1999, the company
provides consumer-to-consumer, business-to-consumer and business-to-business sales services
via web portals, as well as electronic paymentservices, shopping search engines and cloud
computing services. It owns and operates a diverse array of businesses around the world in
numerous sectors, and is named as one of the world's most admired companies by Fortune.
At closing time on the date of its initial public offering (IPO) - US$25 billion - the world's
highest in history, 19 September 2014, Alibaba's market value was US$231 billion. As of June
2018, Alibaba's market cap stood at US$542 billion. It is one of the top 10 most valuable and
biggest companies in the world. In January 2018, Alibaba became the second Asian company to
break the US$500 billion valuation mark, after Tencent. As of 2018, Alibaba has the 9th highest
global brand value.
With operations in over 200 countries and territories, Alibaba is the world's largest retailer, one
of the largest Internet and AI companies, one of the biggest venture capital firms, and one of the
biggest investment corporations in the world. The company hosts the largest B2B (Alibaba.com)
and B2C (Taobao, Tmall) marketplaces in the world. Its online sales and profits surpassed all US
retailers (including Walmart, Amazon and eBay) combined since 2015.[17] It has been expanding
into the media industry, with revenues rising by triple percentage points year on year. It also
orchestrated China's Singles' Day into the world's biggest online and offline shopping day, with
its own sales reaching over US$25.4 billion on 11 November 2017.

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 Alibaba Group Holding Limited

Type Public

Traded as NYSE: BABA

ISIN US01609W1027

Industry Internet

Founded 4 April 1999; 19 years ago

Hangzhou, Zhejiang, China

Founder Jack Ma
Peng Lei

Headquarters Hangzhou, Zhejiang, China

Area served Worldwide

Key people  Jack Ma

(Executive Chairman)
 Joseph Tsai
(Executive Vice Chairman)
 J. Michael Evans
(President)
 Daniel Zhang
(CEO)

Products E-commerce, online auction hosting, online money transfers, mobile

commerce

Services Online shopping

Revenue CN¥250.266 billion (US$39.898 billion, 2018)[1]

Operating CN¥69.314 billion (US$11.050 billion, 2018)[1]

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 income
Net income CN¥61.412 billion (US$9.791 billion, 2018)[1]

Total assets CN¥717.124 billion (US$114.326 billion, 2018)[1]

Total equity CN¥436.438 billion (US$69.578 billion, 2018)[1]

Number of 66,421 (March 31, 2018)[1]

employees

Subsidiaries Alibaba.com, Guangzhou Evergrande Taobao

F.C., Shenma, Taobao, Tmall, UCWeb, Daraz, AliExpress,
Juhuasuan.com, 1688.com, Alimama.com, Ant
Financial, Cainiao, Lazada, Youku Tudou, Alibaba Cloud

Website www.alibabagroup.com

COMPANY SUPPLYCHAIN MANAGEMENT

Learning from Alibaba Supply Chain Management
As supply management practitioners plan for 2016, they can learn from some of Alibaba’s
innovative strategies. These include:

 Developing a long-term strategy for differentiation

 Connecting with partners
 Drafting supply chain processes
 Leveraging mobile technology
 Encouraging sales for greater selection
 Capitalizing on advertising opportunities.

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1. Differentiation Strategy
How Alibaba does it: Alibaba’s strategy for differentiation has enabled it to pull ahead of its
competitors. It operates as a middleman, connecting only buyers and sellers, avoiding the need
for physical warehouses.
How you can do it: Too many organizations lack long-term strategies that could set them apart
from competitors. To differentiate your company, conduct a geographically-based cost analysis
and pass those savings onto consumers.
With regional-pricing quotes, supply chain managers can determine a company’s least expensive
supplier for each of its needed resources based on its unique location. For domestic purchases,
local suppliers often offer the best price. However, larger suppliers serving a global market might
offer a volume discount that beats the price of local suppliers. Designate the best-price supplier
for your region as a primary provider, and then use runner-up suppliers as backups in case of a
supply shortage from your primary provider. Your brand’s best differentiator is beating
competitors’ prices thanks to geography-based cost savings.

2. Partner Connections
How Alibaba does it: Alibaba enables small merchants and suppliers to reach thousands of new
customers like never before. It allows any user, whether a consumer or merchant, to interact and
trade with any other consumer and business in its network. In particular, it has opened the direct-
sale door for many merchants in Asia, a market that Amazon and eBay have yet to penetrate
successfully. Alibaba knows supplier and customer satisfaction is vital to its continued success.
Its middleman approach shows it’s aware of suppliers’ struggles.
How you can do it: Supply management leaders should look at their organizations much the
same way. Where can you alleviate pain points for suppliers and both internal and external
customers? How can you remove barriers to interaction, connection, and sales? One way is to
understand the customer journey. Imagine what it’s like for customers to interact with your brand
throughout the procurement process and across multiple channels. Determine the stages in which
your organization can meet customer needs without assuming the logistical, transportation and
administrative costs associated with directly supplying resources.
3. Supply Chain Process
How Alibaba does it: Alibaba emphasizes buyer protection, an important issue in this era of e-
commerce rife with shady sellers. When an Alibaba customer pays for a good or service, the
funds make a pit stop in the company’s escrow account until the customer receives the order.
Concerned customers can request pre-delivery product inspections. Only when the buyer
confirms satisfaction does Alibaba forward payment to the seller, thus greatly reducing fraud on
its site.
How you can do it: Map your supply chain from start to finish. To start, look at the costs at each
step, fulfillment ratios, and customer-satisfaction numbers. You may have to stand back and
work on your business rather than in it to streamline and to exceed expectations.

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To do this, you’ll need to understand how suppliers function before ever interacting with your
company. While you probably know your first-tier suppliers well, consider your relationship
with suppliers on the second or third tier. How critical are they to your supply chain? Where are
their factories, and how established are they? Consider what might happen to your business if
one of these lower-tier suppliers failed because of a natural disaster, financial collapse or civil
unrest. Too often, procurement organizations rely on the unsustainable model of first-tier
suppliers managing lower-tier suppliers. For example, 40 percent of businesses buying within the
United Kingdom have no information on their second-tier suppliers, according to research from
Achilles, a U.K.-based supply chain risk management firm.
Map your supply chain using a database for information storage. Seek to give customers peace of
mind by enabling them to request information about everyone involved in their supply chains.
Think of this as a system of cascades: When the buyer makes a purchase, your organization
sends a request to your first-tier supplier, who sends a request to the second-tier supplier, and so
forth. Build your database gradually by requesting that companies send information up the chain.
This enables your business to identify risk-prone supply chains, address bottlenecks and avoid
relying on companies with long lead times or unethical business practices. Work beyond your
business by collaborating with suppliers: By helping you map your supply chain, they can also
map their own supply chains with this information. Collaboration can reduce the cost and time
expenses associated with supply chain mapping.
4. Mobile Technology
How Alibaba does it: Part of Alibaba’s long-term strategy focuses on adapting its e-commerce
sites to mobile platforms. It has already embarked on the strategy: In June, Alibaba acquired
Alipay, an electronic-payments affiliate, and a cloud-computing services arm to accommodate
the more than 600 million Chinese web users who are increasingly migrating to smartphones.
How you can do it: A challenge for any decentralized operation is sharing information among
teams. To remedy this, invest in a mobile-friendly supply chain management platform. To
compete in 2016, your team needs to plan, forecast and track shipments in real time. If we can
learn anything from Alibaba, it’s that mobile technology is now.
5. Sales and Selection
How Alibaba does it: While many U.S. brands encourage Black Friday shopping by offering
specials and discounts, Alibaba CEO Daniel Zhang created his own shopping holiday, Singles
Day. The Nov. 11 holiday, which began in 2009, is now the single biggest shopping day in the
world. In 2014, the e-commerce giant trans-
acted more than US$9 billion in sales in China during the 24-hour period.
How did Alibaba persuade shoppers to bite? By offering an incredible selection. Singles Day this
year included 6 million products from more than 30,000 brands from 25 countries, including
P&G, Burberry, Estée Lauder, Macy’s, and Apple.
How you can do it: With an eager customer base and a huge array of products, Alibaba is
spurring purchases on its self-started holiday. Although not everyone can invent holidays for
business reasons, Alibaba’s strategy can teach us a bit about driving sales. Greater product
selection draws more customers who see products they need, which drives sales, which in turn
drives profits. Between greater sales volume and boosted profits, Alibaba has more money to

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reinvest into the operational aspects of its business, such as pursuing supply chain improvements
and further broadening supplier partnerships.
6. Advertising Opportunities
How Alibaba does it: Every time you watch an advertisement on YouTube, the advertiser pays
between 10 cents and 30 cents per ad per view. Although this might seem like small change, it
isn’t when considering that many YouTube videos generate millions or even hundreds of
millions of views. Alibaba, in an all-cash transaction, recently acquired the “YouTube of China,”
the Internet television platform Youku Tudou. The acquisition represents an opportunity for
Alibaba to increase its media capabilities and potential for advertising, as the brand surely will
run ads for its online marketplace on the video platform.
How you can do it: While buying YouTube probably isn’t an option for your brand — even if
Google were to sell — Alibaba’s purchase underscores a chronic problem for supply chain
companies: visibility. To boost your customer base and reduce the hassle of acquiring new
customers, be on the lookout for advertising opportunities.
Depending on your target customer, this could be in the form of ads in business publications or
more general advertisements, such as television or YouTube ads. Remember, your per-customer
operation costs decrease when they’re divided among more customers.
Revolutionizing Supply Chain Management
In Alibaba’s post-IPO days, business analysts doubted whether the company’s stock value could
reach US$150 billion in 2015. But it was closing in on a net worth of US$145 billion as of
September. Alibaba’s founder, Jack Ma, rewrote our industry’s best practices. Ma knew he
needed to do things differently to dethrone other big players. He understood it required a bold
new strategy, an intimate familiarity with logistical processes, a trusting connection between
supplier and customer and the technology to be mobile and on-demand. Don’t be afraid to
operate differently, and your supply chain management operation could be the next great
disruptor.

Alibaba Group and Unilever China announced today a comprehensive strategic partnership that
will enable Unilever to reach customers across China with unprecedented precision and
effectiveness through Alibaba Group's data-driven ecosystem. Key areas of collaboration include
rural China penetration, cross-border e-commerce, consumer protection and Big Data.

"We are very pleased to amplify our partnership with an industry leader such as Unilever," said
Daniel Zhang, Chief Executive Officer of Alibaba Group. "We look forward to building on our
success in sales over the years and taking the collaboration to the next level. Moving forward,
Alibaba Group and Unilever will jointly innovate in Big Data analytics application, cross-border
e-commerce, and supply chain management. In this rapidly changing business landscape, we are
committed to continually provide greater value to merchants and better experiences to shoppers."

"Alibaba has changed the shopping habit of Chinese consumers. Its mission is to make it easy to
do business everywhere, and its vision is to build the future infrastructure of commerce. This
meets the Unilever's development needs in China," said Marijn Van Tiggelen, Unilever North

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 Asia President. "Alibaba is the leading internet company in China, with the most innovative
thinking. It's not only an online store, but also a solution platform for online payment, e-finance,
and e-commerce logistics. In cooperation with Alibaba, Unilever can provide more convenient
services to consumers in China."

This agreement is a major milestone for a partnership that started five years ago with a single
Tmall.com store, which has since grown steadily on a solid foundation of mutual trust and
success over the years. Through this strategic partnership, Alibaba Group and Unilever China
will work together to:

 Strengthen cooperation to expand distribution channels, especially for consumers in rural areas
to enjoy more convenient access to Unilever products
 Further develop cross-border ecommerce cooperation and make the Tmall Global Unilever
store home to the richest selection of Unilever products from around the world
 Expand application of Big Data to optimize Unilever's digital advertising strategy through
Alimama, Alibaba's online marketing business, and reach more consumers through online-
offline retail integration
 Deepen collaboration in Alibaba's Blue Star program where each product is tagged with a
unique QR code that allows the consumer to verify its authenticity and origin. This will help
protect Unilever's brand and combat counterfeit goods to protect the customer user experience.
 Develop innovations in supply chain management and offline distribution models
The upcoming Unilever Week on Tmall.com, scheduled for July 22 to 24, will celebrate the start
of this partnership agreement.

Unilever China opened its first Tmall.com flagship store in June 2011 and, most recently, a
Tmall Global flagship in September 2014, leveraging the free trade zone and bonded warehouse
model.

About Alibaba Group

Alibaba Group's mission is to make it easy to do business anywhere. The company is the largest
online and mobile commerce company in the world in terms of gross merchandise volume.
Founded in 1999, the company provides 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 hundreds of millions of consumers and other businesses.

Alibaba Group's major businesses include:

 Taobao Marketplace (www.taobao.com), China's largest online shopping destination

 Tmall.com (www.tmall.com), China's largest third-party platform for brands and retailers
 Juhuasuan (www.juhuasuan.com), China's most popular online group buying marketplace
 Alitrip (www.alitrip.com), a leading online travel booking platform
 AliExpress (www.aliexpress.com), a global online marketplace for consumers to buy directly
from China
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 Alibaba.com (www.alibaba.com), China's largest global online wholesale platform for small
businesses
 1688.com (www.1688.com), a leading online wholesale marketplace in China
 Aliyun (www.aliyun.com), a provider of cloud computing services to businesses and
entrepreneurs.

INTEGRITY AND COMPLIANCE

Alibaba Group is committed to the highest standards of business conduct in our relationships
with each of our stakeholders, including our customers, business partners and shareholders. This
commitment requires that we conduct our business in accordance with all applicable laws and
regulations and in accordance with the Alibaba Group Code of Business Conduct.

We mandate that our employees conduct all business with outside parties in a manner that
reflects our value of integrity. We will not tolerate any form of unethical or unlawful conduct.
Our stakeholders' concerns are important to us and anyone is welcome to contact our Integrity
and Compliance Office with questions or for guidance regarding a business practice or
compliance issue or to report any questionable or allegedly unethical or illegal behavior.

Anyone submitting a complaint or question is encouraged to provide his or her name, contact
information and appropriate details of the questionable or allegedly unethical or illegal behavior
so that we may contact him or her directly, if necessary. We will handle all inquiries discreetly
and make every effort to maintain, within the limits allowable by the applicable laws and
regulations, the confidentiality of any inquiry or report. We will conduct all investigations in
accordance with applicable laws and regulations.

Alibaba Group will not tolerate any retribution or retaliation taken against any person who has,
in good faith, provided information or otherwise assisted in an investigation or proceeding
regarding any questionable or allegedly unethical or illegal behavior.