including business-to-business online web portals, online retail and payment services,

a shopping search engine and data-centric cloud computing services. In 2012, two of

Alibaba’s portals together handled 1.1 trillion yuan in sales, more than competitors eBay

and Amazon.com combined. The company primarily operates in the People’s Republic of China,

and in March 2013 was estimated by The Economist magazine to have a valuation between $55 billion

to more than $120 billion. The group began in 1999 when Jack Ma founded

the web site Alibaba.com, a business-to-business portal to connect Chinese manufacturers with

overseas buyers. Alibaba's consumer-to-consumer portal Taobao, similar to eBay, features nearly

a billion products and is one of the 20 most-visited websites globally. Alibaba Group's sites account

for over 60% of the parcels delivered in China. Alipay, an online payment escrow service,

accounts for roughly half of all online payment transactions within China. The vast majority

of these payments occur using Alibaba services. The company is seeking an initial public offering

in the United States after a deal could not be reached with Hong Kong regulators.

Companies and affiliated entities Alibaba.com

Alibaba.com Limited, the primary company of Alibaba Group, is the world’s largest online

business-to-business trading platform for small businesses.

Founded in Hangzhou in eastern China, Alibaba.com has three main services. The company’s English

language portal Alibaba.com handles sales between importers and exporters from more

than 240 countries and regions. The Chinese portal 1688.com was developed for domestic

business-to-business trade in China. In addition, Alibaba.com offers a transaction-based retail

website, AliExpress.com, which allows smaller buyers to buy small quantities of goods at

wholesale prices. In 2013, 1688.com launched a direct channel

that is responsible for $30 million in daily transaction value.

Taobao

Taobao Marketplace, or Taobao, is China's largest consumer-to-consumer online shopping

platform. Founded in 2003, it offers a variety of products for retail sale. In October 2013

it was the third most visited web site in China, according to Alexa.com. Taobao's growth

was attributed to offering free registration and commission-free transactions using a free

third-party payment platform. Advertising makes up 85 percent of the company's

total revenue, allowing it to break even in 2009. Taobao's 2010 profit was estimated to

be 1.5 billion yuan, only about 0.4 percent of their total sales figure of 400 billion

yuan that year, way below the industry average of 2 percent, according to iResearch estimates.

According to Zhang Yu, the director of Taobao, the number of stores on Taobao with annual

sales under 100 thousand yuan increased by 60% between 2011 and 2013. Over the same period,

the number of stores with sales between 10 thousand and 1 million yuan increased by 30%, and

the number of stores with sales over 1 million yuan increased by 33%. Taobao's total sales

exceeded 1 trillion yuan in 2012. And on November 11, 2012, the biggest online shopping

promotion activity, Taobao accomplished 19.1 billion yuan sales in one day.

Tmall.com

Tmall.com was introduced in April 2008 as an online retail platform to complement the

Taobao consumer-to-consumer portal and became a separate business in June 2011. As of October

2013 it was the eighth most visited web site in China, offering global brands to an increasingly

affluent Chinese consumer base. Juhuasuan

Juhuasuan.com is a group shopping website in China. It was launched by Taobao in March

2010 and became a separate business in October 2011. Juhuasuan offers "flash sales," products

that are available only for a fixed time period, which can last from one or two days to a full

month. To buy at the discounted price, buyers must purchase the item within that defined

time. eTao

eTao.com was beta-launched by Taobao in October 2010 as a comparison shopping website, and

became a separate business in June 2011. It offers search results from most Chinese online

shopping platforms, including product searches, sales and coupon searches. Online shoppers

can use the site to compare prices from different sellers and identify products to buy. According

to the Alibaba Group web site, eTao offers products from Amazon China, Dangdang, Gome,

Yihaodian, Nike China and Vancl, as well as Taobao and Tmall.

Alipay Launched in 2004, Alipay.com is a third-party

online payment platform with no transaction fees. According to analyst research report,

Alipay has the biggest market share in China with 300 million users and control of just

under half of China's online payment market in February 2014. According to Credit Suisse,

the total value of online transactions in China grew from an insignificant size in 2008

to around RMB 4 trillion in 2012. Alipay provides an escrow service, in which

consumers can verify whether they are happy with goods they have bought before releasing

money to the seller. This service was offered for what the company says are China's weak

consumer protection laws, which have reduced consumer confidence in C2C and even B2C quality

control. The company says Alipay operates with more

than 65 financial institutions including Visa and Mastercard to provide payment services

for Taobao and Tmall as well as more than 460,000 Chinese businesses. Internationally,

more than 300 worldwide merchants use Alipay to sell directly to consumers in China. It

currently supports transactions in 12 foreign currencies.

The payment methods are MasterCard, Visa, Boleto Bancário, Transferência Bancária,

Maestro, WebMoney, and QIWI Кошелек as of May 2014.

The PBOC, China's central bank, issued licensing regulations in June 2010 for third-party payment

providers. It also issued separate guidelines for foreign-funded payment institutions. Because

of this, Alipay, which accounts for half of China's non-bank online payment market, was

restructured as a domestic company controlled by Alibaba CEO Jack Ma in order to facilitate

the regulatory approval for the license. The 2010 transfer of Alipay's ownership was controversial,

with media reports in 2011 that Yahoo! and Softbank were not informed of the sale for

nominal value. Chinese business publications Century Weekly criticised Ma, who stated that

Alibaba Group's board of directors was aware of the transaction. The incident was widely

criticized in foreign and Chinese media as harming foreign trust in making Chinese investments.

The ownership dispute was resolved by Alibaba Group, Yahoo!, and Softbank in July 2011.

In 2013 Alipay launched a financial product platform called Yuebao. As of June 2013 the

company still had what it called "a minor paperwork problem" with the China Securities

Regulatory Commission, but the company said that they planned to expand the product while

these are sorted out. Alibaba Cloud Computing

Alibaba Cloud Computing aims to build a cloud computing service platform, including e-commerce

data mining e-commerce data processing, and data customization. It was established in

September 2009 in conjunction with the 10th anniversary of Alibaba Group.

AliExpress Launched in 2010, AliExpress.com is an online

retail service made up of mostly small sellers offering products to online buyers. The site

has registered users and buyers in more than 220 countries.

China Yahoo! In October 2005, Alibaba Group formed a strategic

partnership with Yahoo! and acquired China Yahoo!, a Chinese portal that focuses on Internet

services like news, email, and search. In April 2013, Alibaba Group announced that,

as part of the agreement to buy back the Yahoo! Mail stake, technological support for China

Yahoo! Mail service would be suspended and the China Yahoo! Mail account migration would

begin. Several options were offered to users to make the transition as smooth as possible,

and China Yahoo! users had four months to migrate their accounts to the Aliyun mail

service, the Yahoo! Mail service in the United States, or to another third-party e-mail provider

of the user's choice. Yahoo! China closed its mail service on August 19, 2013. E-mails

sent to Yahoo! China accounts can be forwarded to an Alimail box until December 31, 2014.

Users are also allowed to transfer e-mail accounts to yahoo.com or any other e-mail

service. It is estimated there are no more than a million users with Yahoo! Mail for

China and chances are they also own other e-mail accounts.

Laiwang In October 2013, the company's chairman Jack

Ma announced that the company would no longer use Tencent's messaging application WeChat,

and would henceforth promote its own messaging application and service, Laiwang.

ChinaVision Media Group In March 2014, Alibaba agreed to acquire a

controlling stake in ChinaVision Media Group for $804 million. The two firms announced

they would establish a strategic committee for potential future opportunities in online

entertainment and other media areas. Youku Tudou

In April 2014, Alibaba and Yunfeng Capital, a private equity company controlled by Alibaba’s

founder, Jack Ma, agreed to acquire a combined 18.5 percent stake in Youku Tudou, which broadcasts

a series of popular television programs and other videos over the Internet.

11 Main On June 11, 2014, Alibaba launched U.S. shopping

site 11 Main. The 11 Main marketplace hosts more than 1,000 merchants in categories such

as clothing, fashion accessories and jewelry as well as interior goods and arts and crafts

and it plans to keep adding more, the company said.

Corporate governance As of January 2013, Jack Ma was Alibaba Group's

chief executive officer. Ma announced his intention to step down from this post on January

15, 2013. CEO Jonathan Lu confirmed this IPO again in

July 2013, quoted in the press as saying, “We are ready and can do an IPO any time.”

He also revealed that the firm has still not decided where to list, but is looking at the

stock exchanges of New York and Hong Kong. On September 25, 2013, a media report confirmed

that negotiations with Hong Kong regulators had deteriorated and a US IPO is being sought

by the company as of the date of the report. Analysts estimated that the Alibaba IPO would

have added US$25 million to the Hong Kong Exchanges and Clearing's annual revenues.

History The company was founded in the current CEO,

Jack Ma's Apartment. Jack Ma said, "One day I was in San Francisco in a coffee shop, and

I was thinking Alibaba is a good name. And then a waitress came, and I said do you know

about Alibaba? And she said yes. I said what do you know about Alibaba, and she said ‘Alibaba

and 40 thieves'. And I said yes, this is the name! Then I went onto the street and found

30 people and asked them, ‘Do you know Alibaba?’ People from India, people from Germany, people

from Tokyo and China… They all knew about Alibaba. Alibaba — open sesame. Alibaba

is a kind, smart business person, and he helped the village. So…easy to spell, and globally

known. Alibaba opens sesame for small- to medium-sized companies. We also registered

the name Alimama, in case someone wants to marry us!"

Company timeline In December 1998, Jack Ma and other 17 founders

released their first online marketplace named "Alibaba Online".

From 1999 to 2000, Alibaba Group raised a total of US$25 million from SoftBank, Goldman

Sachs, Fidelity and some other institutions. In December 2001, Alibaba.com achieved profitability.

In May 2003, Taobao was founded as a consumer e-commerce platform.

In December 2004, Alipay, which started as a service on the Taobao platform, became a

separate business. In October 2005, Alibaba Group took over the

operation of China Yahoo! as part of its strategic partnership with Yahoo! Inc.

In November, 2007, Alibaba.com successfully listed on the Hong Kong Stock Exchange.

In April 2008, Taobao established Taobao Mall, a retail website, to complement its C2C marketplace.

In September 2008, Alibaba Group R&D Institute was established.

In September 2009, Alibaba Group established Alibaba Cloud Computing in conjunction with

its 10-year anniversary. In May 2010, Alibaba Group announced a plan

to earmark 0.3% of its annual revenues to fund environmental protection initiatives.

In October 2010, Taobao beta-launched eTao as a shopping search engine.

In June 2011, Alibaba Group reorganized Taobao into three separate companies: Taobao Marketplace,

Taobao Mall and eTao. In July 2011, Alibaba Cloud Computing launched

its first self-developed mobile operating system, Aliyun OS over K-Touch Cloud Smartphone.

In January 2012, Tmall.com changed its Chinese name as part of a rebranding exercise.

In March 2014, Alibaba group said it will begin the process of filing for an initial

public offering in the U.S. Prior to its IPO filing on Form F-1 as a foreign

issuer in the U.S., Alibaba undertook an aggressive acquisition spree - previously atypical for

the company - acquiring numerous majority and minority stakes in companies including

micro-blogging service Weibo, China Vision Holdings, and car sharing service Lyft.

On May 6, 2014 Alibaba Group filed registration documents to go public in the U.S. in what

may be one of the biggest initial public offerings in American history.

On June 5, 2014 Alibaba group agreed to take a 50 percent stake in Guangzhou Evergrande

Football Club, winners of 2013 Asian Champions League, for 1.2 billion yuan.

In June 2014, Alibaba acquired the Chinese mobile internet firm UCWeb. The price of the

purchase has not been disclosed but the company did claim that the acquisition creates the

biggest merger in the history of China's internet sector.

Gold Supplier membership and related controversy Alibaba.com offers a Gold Supplier membership

to try to ensure that each seller is genuine. "To qualify for a Gold Supplier membership,

a supplier must complete an authentication and verification process by a reputable third-party

security service provider appointed by Alibaba.com". While the majority of suppliers are reported

to be genuine, there have been cases of sellers seeking to defraud unsuspecting buyers. In

February, 2011 controversy ensued when Alibaba's corporate office admitted that it had granted

the mark of integrity of its “China Gold Supplier” program to more than 2,000 dealers

that had subsequently defrauded buyers; the firm's share price dropped "abruptly" after

the announcement. A statement from the firm reported than Yan Limin, the General Manager

of Alibaba.com at the time, had been dismissed in March for "misconduct"; Phil Muncaster

of UK's The Register additionally reported that "a further 28 employees had been involved

in dodgy dealings". As the Economist noted, the company's response has conflicting components:

Alibaba's promulgated view that its corrective actions indicate its commitment to quality

and integrity, versus a damage control view suggesting that the subscription-driven, third-party

verified “China Gold Supplier” program was endangered by diminished trust in its

endorsement system, removing the incentive for global buyers to choosing Alibaba as their

Business-to-business service, thus more broadly endangering Alibaba through impact on its

brand and capabilities. Overall, the scandal has placed the head of Alibaba Group, Jack

Ma—who is described as having been furious over the scandal—in a position to personally

fight to win back trust. Research and development

Alibaba introduced the Alibaba Group R&D institute in 2008. One year later, Alibaba filed around

350 patent and utility model applications. Brick and mortar stores