Alizila News

October 13, 2016

Letter to Shareholders from Executive Chairman Jack Ma

Dear Alibaba Shareholders,

On the day of our IPO in September 2014, I said that what was important was not the money that we raised, but what that money represented: the trust and confidence of investors around the world. Since that day, the global economy has struggled, oscillating between hope and despair. Alibaba Group also experienced many trials and tribulations, but we never forgot the trust you placed in us to live up to our responsibilities and keep our promises.

Over the last two years, the Alibaba team has produced outstanding results. In fiscal year 2016, we continued to build out the world’s largest retail ecosystem. Gross merchandise volume transacted on our China retail platforms surpassed an unprecedented RMB 3 trillion. In the fiscal year prior to our IPO, mobile revenue accounted for a single-digit percentage of total revenue from our China retail marketplaces; in our most recent quarter, mobile contributed more than 75% of total revenue. Our mobile monetization rate now exceeds that of the desktop, making Alibaba Group the largest mobile commerce company in the world. We have more than 430 million annual active buyers, which means one out of every three individuals in China has made a purchase on our retail marketplaces. Additionally, our cloud computing business, digital media and entertainment businesses, and the strategic bets we have made on innovative, emerging technologies are demonstrating strong growth that we believe will be sustainable for years to come.

We’re proud of our accomplishments, but we want to do far more. We are not merely trying to shift buy/sell transactions from offline to online, nor are we changing conventional digital marketing models to squeeze out a little additional profit. We are working to create the fundamental digital and physical infrastructure for the future of commerce, which includes marketplaces, payments, logistics, cloud computing, big data and a host of other fields.

Supported by the twin pillars of cloud computing and Big Data, our goal is to empower merchants with the ability to transform and upgrade their businesses for the future. Eight years ago, we began to strategically invest in Alibaba Cloud in order to fulfill this mission. Today, Alibaba Cloud hosts 35% of total websites in China while also providing clients with cloud computing and big data services. Alibaba Cloud is a company with cutting-edge technology and an extensive range of products and now ranks among the world’s top three cloud computing companies. Most importantly, Alibaba Cloud seeks to enable all businesses, large and small, to benefit from the greater operational efficiency and lowered costs that cloud computing can provide.

The widespread adoption of cloud computing is important, yet it is just a piece of a larger picture that we see coming into focus. Throughout history, technological disruptions have followed similar trajectories: 20 years of technological disruption followed by 30 years of further rapid change as new technologies are applied throughout society. The internet revolution is a historical inflection point, much like when electricity was introduced, and it may have an even greater impact. Over the next 30 years, with computing power as the new “technology breakthrough” and data as the new “natural resource,” the landscape of retail, financial services, manufacturing and entertainment will be transformed.

Our traditional e-commerce business is already undergoing rapid change and progress. In the coming years, we anticipate the birth of a re-imagined retail industry driven by the integration of online, offline, logistics and data across a single value chain. With e-commerce itself rapidly becoming a “traditional business,” pure e-commerce players will soon face tremendous challenges. This is why we are adapting, and it’s why we strive to play a major role in the advancement of this new economic environment. We already see meaningful changes taking place today in the operations of our merchants’ businesses. For example, every day, more than 6 million businesses currently use our merchant mobile app, called Qianniu, which helps them improve sales and marketing, as well as enhance overall management quality and efficiency.

We hope to not only help businesses in China, but also extend our reach so we can help companies all over the world to grow. Over the past two years, we have seen growing resistance to globalization due to the uneven distribution of its benefits. We believe, the commerce infrastructure we have created in China– marketplaces, payments, logistics, cloud computing and big data, all working in concert–can be applied on a global scale to lift up small and medium businesses and ordinary consumers around the world. The personal privilege of becoming a special advisor to the United Nations on youth entrepreneurship and small businesses, and advocating for the successful inclusion of eWTP (electronic world trade platform) into the official G20 Leaders Communiqué issued at the Hangzhou Summit are among our many efforts to make a difference on this front.

Alibaba is a company aiming to help solving social problems. In 20 years, we hope to serve 2 billion consumers around the world, empower 10 million profitable businesses and create 100 million jobs. This will be an even more difficult journey than the one behind us.

Sharing these past two years with you has inspired hope and confidence about the future. It has reinforced my belief that digital disruption will bring us closer to a level playing field for young people and small businesses. It has reinforced my belief that perseverance will make the world better. I can already see this future unfolding, and I am more excited today than I was when I started Alibaba seventeen years ago…

Let us make it easy to do business anywhere!

Jack Ma
Alibaba Group Executive Chairman