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Home , AliExpress, Jack Ma, Tmall Genie

OUR HISTORY AND CORPORATE STRUCTURE

We are a holding company established under the Cayman Companies Law on June 28, 1999. We conduct our business in through our subsidiaries and variable interest entities, as well as in other countries and regions.

The following is a summary of our key business milestones:

Calendar Year China Internet Population* China Mobile Internet Population*

1999  Alibaba founded in Jack ’s 9Mn apartment in NA

 Alibaba.com launched

 1688.com (formerly known as Alibaba.com.cn) launched

2003 80Mn  Marketplace launched NA (Taobao)

2004  launched 94Mn NA

2007 210Mn  Alimama monetization 50Mn platform launched

2008  launched 298Mn 118Mn

2009 384Mn  founded 233Mn

2010  AliExpress launched 457Mn 303Mn  Taobao App launched

2011 513Mn  Alipay divested 356Mn

* Source for China Internet Population and China Mobile Internet Population: CNNIC. Note: Data on China Mobile Internet Population was not disclosed until 2006.

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Calendar Year China Internet Population* China Mobile Internet Population*

2014  Tmall Global launched 649Mn 557Mn  UCWeb majority ownership acquired

 Amap majority ownership acquired

 Ant Financial 33% stake acquisition agreed

 Listed on NYSE

 Fliggy rebranded as an independent business 2015 688Mn  DingTalk launched 620Mn  Alibaba Health majority ownership acquired

 Koubei established

 Lingshoutong launched 2016  Freshippo (known as “Hema” 731Mn in Chinese) launched 695Mn

 privatized

 Lazada majority ownership acquired 2017 772Mn  Intime privatized 753Mn  launched

 Network majority ownership acquired 2018  Ele.me majority ownership 829Mn acquired 817Mn (ele.me)  11.11 global shopping festival: our China retail marketplaces, Lazada and AliExpress generated GMV of RMB213.5Bn (US$30.8Bn)

 Ele.me and Koubei integrated into local consumer services business 2019 854Mn(1)  majority 847Mn(1) ownership acquired  Kaola acquired (Kaola)  Ant Financial 33% equity interest received(2)

* Source for China Internet Population and China Mobile Internet Population: CNNIC. As of calendar year end, unless otherwise stated.

(1) As of June 30, 2019.

(2) Pursuant to the 2014 transaction agreements and the relevant amendments to these agreements.

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Major Acquisitions and Investments

In addition to organic growth, we have made, or have entered into agreements to make, strategic investments, acquisitions and alliances that are intended to further our strategic objectives. See “Financial Information — Recent Investment, Acquisition and Strategic Alliance Activities” for further details on our major acquisitions and strategic investment and alliance activities during the Track Record Period and the period through the Latest Practicable Date.

Our Major Subsidiaries and Operating Entities

The principal business activities and date of establishment of each of our Major Subsidiaries, are shown below:

Name of Date and Jurisdiction company Principal Business Activities of Establishment

Taobao (China) An indirect subsidiary of Taobao Holding and a December 7, 2004, PRC Software Co., Ltd. (淘 wholly-foreign owned enterprise and primarily 寶(中國)軟件有限公司) involved in the operation of Taobao Marketplace.

Zhejiang Taobao An affiliated consolidated entity of Taobao (China) September 4, 2003, Network Co., Ltd. (浙 Software Co., Ltd. (淘寶(中國)軟件有限公司) and PRC 江淘寶網絡有限公司) primarily involved in the operation of Taobao Marketplace.

Zhejiang Tmall An indirect subsidiary of Taobao Holding and a October 25, 2010, PRC Technology Co., Ltd. wholly-foreign owned enterprise and primarily (浙江天貓技術有限 involved in the operation of Tmall. 公司)

Zhejiang Tmall An affiliated consolidated entity of Zhejiang Tmall March 28, 2011, PRC Network Co., Ltd. (浙 Technology Co., Ltd. (浙江天貓技術有限公司) and 江天貓網絡有限公司) primarily involved in the operation of Tmall.

Hangzhou Cainiao Our indirect subsidiary and primarily involved in the October 27, 2016, PRC Supply Chain operation of Cainiao Network. Management Co., Ltd. (杭州菜鳥供應鏈管理有 限公司)

Zhejiang Alibaba Cloud Our indirect subsidiary and primarily involved in the December 13, 2011, Computing Ltd. (浙江阿 operation of our cloud computing business. PRC 里巴巴雲計算有限公司)

Alibaba Cloud An affiliated consolidated entity of Zhejiang Alibaba April 8, 2008, PRC Computing Ltd. (阿里雲 Cloud Computing Ltd. (浙江阿里巴巴雲計算有限公 計算有限公司) 司) and primarily involved in the operation of our cloud computing business.

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Name of Date and Jurisdiction company Principal Business Activities of Establishment

Alibaba (China) Our indirect subsidiary and primarily involved in the September 9, 1999, Technology Co., Ltd. operation of Alibaba.com, 1688.com and AliExpress. PRC (阿里巴巴(中國)網絡技 術有限公司)

Hangzhou Alibaba An affiliated consolidated entity of Alibaba (China) December 7, 2006, PRC Advertising Co., Ltd. Technology Co., Ltd. (阿里巴巴(中國)網絡技術有限 (杭州阿里巴巴廣告有限 公司) and primarily involved in the operation of 公司) Alibaba.com, 1688.com and AliExpress.

Youku Internet An indirect subsidiary of Alibaba Investment and November 14, 2005, Technology (Beijing) primarily involved in the operation of Youku’s PRC Co., Ltd. (優酷網絡技術 business. (北京)有限公司)

Youku Information An affiliated consolidated entity of Beijing Youku February 24, 2006, PRC Technology (Beijing) Technology Co., Ltd. (北京優酷科技有限公司) and Co., Ltd. (優酷信息技術 primarily involved in the operation of Youku’s (北京)有限公司) business.

Reasons for the Listing

In September 2014, we completed an and listing of our ADSs on the NYSE.

We believe that the Listing on the Hong Kong Stock Exchange will present us with an opportunity to further expand our investor base and broaden our access to capital markets.

Corporate Structure

As of June 30, 2019, we conducted our business operations across approximately 710 subsidiaries and consolidated entities incorporated in China and approximately 530 subsidiaries and consolidated entities incorporated in other jurisdictions. Like many large scale, multinational companies with businesses around the world and across industries, we conduct our business through a large number of Chinese and foreign operating entities as we continue to expand through organic growth and acquisitions and consolidations of new businesses. The chart below summarizes our corporate legal structure:

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Our Company

100% 100%

Taobao Holding Limited Alibaba Investment Limited (Cayman Islands)(1) (British Virgin Islands)(1)

100%

Taobao China Holding Limited (Hong Kong)(1) 100% 100% 50.3% 100% (through (through (through (through intermediate intermediate intermediate intermediate 100% holding holding holding holding Offshore entities) entities) entities) entities) Onshore Hangzhou Cainiao Supply Beijing Youku Taobao (China) Zhejiang Tmall Zhejiang Alibaba Alibaba (China) Chain Management Technology Software Co., Ltd. Technology Co., Ltd. Cloud Computing Ltd. Technology Co., Ltd. Co., Ltd.(2) Co., Ltd.(4)

Youku Information Zhejiang Taobao Zhejiang Tmall Alibaba Cloud Hangzhou Alibaba Technology Network Co., Ltd.(3) Network Co., Ltd.(3) Computing Ltd.(3) Advertising Co., Ltd.(3) (Beijing) Co. Ltd.(3)(4)

Equity interest Contractual arrangements

Notes:

(1) A holding company.

(2) An indirect wholly-owned subsidiary of Cainiao Network. In November 2019, we subscribed for newly issued ordinary shares of Cainiao Network together with certain of Cainiao Network’s existing shareholders, and our equity interest in Cainiao Network increased to approximately 63%. See “Financial Information — Recent Investment, Acquisition and Strategic Alliance Activities — Logistics” for further details. The remaining 37% of equity interest is primarily beneficially owned by a number of investors with significant operational experience in logistics, retail and real estate in China.

(3) Each of these variable interest entities is owned by a PRC entity owned and/or controlled by PRC citizens.

(4) As of the date of this prospectus, as a result of our VIE Structure Enhancement, Beijing Youku Technology Co., Ltd. has replaced Youku Internet Technology (Beijing) Co. Ltd. as the designated wholly-owned entity to enter into contractual arrangements with Youku Information Technology (Beijing) Co. Ltd. and its shareholder.

Shareholding Structure

The following diagram illustrates our shareholding structure as of the Latest Practicable Date:

Other directors and Other public SoftBank Joe Tsai executive officers as a group shareholders 25.8% 6.1% 2.0% 0.9% 65.2%

Our Company

Note: See “Major Shareholders” for the beneficial ownership of each of SoftBank, Jack Ma and Joe Tsai.

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The following diagram illustrates our shareholding structure immediately upon the completion of the Global Offering (assuming all major shareholders’ shareholding remain unchanged as of the Latest Practicable Date and the Over-allotment Option is not exercised):

Other directors and Other public SoftBank Jack Ma Joe Tsai executive officers as a group shareholders 25.2% 6.0% 1.9% 0.9% 66.0%

Our Company

Contractual Arrangements among Our Wholly-Owned Entities, Variable Interest Entities and the Variable Interest Entity Equity Holders

Due to legal restrictions on foreign ownership and investment in, among other areas, value- added telecommunications services, which include the operations of ICPs, we, similar to all other entities with foreign-incorporated holding company structures operating in our industries in China, operate our Internet businesses and other businesses in which foreign investment is restricted or prohibited in the PRC through various contractual arrangements with variable interest entities that are incorporated and 100% owned by PRC citizens or by PRC entities owned and/or controlled by PRC citizens. The relevant variable interest entities hold the ICP licenses and other regulated licenses and operate our Internet businesses and other businesses in which foreign investment is restricted or prohibited. Specifically, our variable interest entities that are material to our business are Zhejiang Taobao Network Co., Ltd., Zhejiang Tmall Network Co., Ltd., Alibaba Cloud Computing Ltd., Hangzhou Alibaba Advertising Co., Ltd. and Youku Information Technology (Beijing) Co., Ltd. We have entered into certain contractual arrangements, as described in more detail below, which collectively enable us to exercise effective control over the variable interest entities and realize substantially all of the economic risks and benefits arising from the variable interest entities. As a result, we include the financial results of each of the variable interest entities in our consolidated financial statements in accordance with U.S. GAAP as if they were our wholly-owned subsidiaries.

Other than the ICP licenses and other licenses and approvals for businesses in which foreign ownership is restricted or prohibited that are held by our variable interest entities, we hold our material assets in, conduct our material operations and generate the significant majority of revenues through, our wholly-owned entities, which primarily provide technology and other services to our customers. We primarily generate our revenue directly through our wholly-owned entities, which directly capture the profits and associated cash flow from operations without having to rely on contractual arrangements to transfer cash flow from the variable interest entities to our wholly-owned entities.

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VIE Structure Enhancement

Overview

The following diagram is a simplified illustration of the ownership structure and contractual arrangements for variable interest entities that are typical in our industry and previously were standard for our Company:

Offshore Holding Legal ownership Company Contractual arrangements

100% (through offshore holding companies) Offshore PRC Onshore PRC – Loan Agreement – Exclusive Call Option Agreement – Proxy Agreement – Equity Pledge Agreement VIE Equity Holders

100% – Exclusive Technical Service Wholly-owned Agreement Variable Interest Entities Entity

We are in the process of enhancing the structure we use to hold our variable interest entities so that we can better ensure the stability and proper governance of our variable interest entities as an integral part of our Company, or the VIE Structure Enhancement. The VIE Structure Enhancement maintains the primary legal framework that we and many peer companies in our industries have adopted to operate businesses in which foreign investment is restricted or prohibited in the PRC. We have completed the VIE Structure Enhancement for all of our material variable interest entities.

Upon the completion of the VIE Structure Enhancement for each variable interest entity, the equity interest of each variable interest entity will, instead of being held by a few individuals, be directly held by a PRC limited liability company, which in turn will be indirectly held (through a layer of PRC limited partnerships) by selected members of the Alibaba Partnership or our management who are PRC citizens. This new structure institutionalizes the governance framework of our variable interest entities.

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Compared with the VIE shareholder structure that is typical in our industry and previously were standard for us, which uses natural persons to serve as direct equity holders of the variable interest entities, we have designed the VIE Structure Enhancement to:

• reduce the key man and succession risks associated with natural person VIE equity holders, through a new structure that has widely dispersed interests among natural person interest holders;

• create a VIE ownership structure that is more stable and self-sustaining, by distancing the natural person interest holders with the variable interest entity with multiple layers of legal entities, including a partnership structure; and

• further enhance our control over the variable interest entities through multiple layers of contractual arrangements.

VIE equity holders after the VIE Structure Enhancement

Prior to the VIE Structure Enhancement, our material variable interest entities were directly or indirectly owned by natural persons.

Following the VIE Structure Enhancement, a material variable interest entity will be directly held by a PRC limited liability company. This PRC limited liability company will in turn be directly or indirectly owned by two PRC limited partnerships, each of which will hold 50% of the equity interest. Each of these partnerships is comprised of (i) a PRC limited liability company, as general partner (which is formed by a number of selected members of the Alibaba Partnership and our management who are PRC citizens), and (ii) the same group of natural persons, as limited partners. Under the terms of the relevant partnership agreements, the natural person limited partners must be members of the Alibaba Partnership or our management who are PRC citizens and as designated by the general partner of the partnership. We may also create additional holding structures in the future in connection with the VIE Structure Enhancement.

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The following diagram is a simplified illustration of the typical ownership structure and contractual arrangements of the variable interest entities following the VIE Structure Enhancement.

Legal ownership Contractual arrangements that give us Our Company effective control over the variable interest entity Contractual arrangements that enable us 100% (through offshore to receive substantially all of the economic Offshore PRC holding companies) benefits from the variable interest entity Onshore PRC Individual Shareholders of G.P. (1)

20% 20% 20% 20% 20%

PRC Limited Individual Liability Company Limited Serving as Partners(1) General Partner 19.99998% 19.99998% 0.0001% 19.99998% 19.99998% 19.99998%

PRC Limited PRC Limited Partnership Partnership 50% 50%

Wholly-owned PRC Investment Holding Company Entities (a PRC Limited Liability Company) 100%

Variable Interest Entities

(1) Selected members of the Alibaba Partnership or our management who are PRC citizens.

Following the VIE Structure Enhancement, the designated wholly-owned entity, on the one hand, and the corresponding variable interest entity and the multiple layers of legal entities above the variable interest entity, as well as the natural persons described above, on the other hand, will enter into contractual arrangements, which are substantially similar to the contractual arrangements we have historically used for our variable interest entities. See “— Contracts that Give us Effective Control of the Variable Interest Entities” and “— Contracts that Enable us to Receive Substantially All of the Economic Benefits from the Variable Interest Entities” below.

Although we believe the VIE Structure Enhancement will further improve our control over our variable interest entities, there continue to be risks associated with the VIE structure in general, as well as with the completion of the VIE Structure Enhancement. See “Risk Factors — Risks Related to Our Corporate Structure.”

The following is a summary of our typical contractual arrangements.

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Contracts that Give Us Effective Control of the Variable Interest Entities

Loan agreements

Pursuant to the relevant loan agreement, our respective wholly-owned entity has granted a loan to the relevant variable interest entity equity holders, which may only be used for the purpose of its business operation activities agreed by our wholly-owned entity. Our wholly- owned entity may require acceleration of repayment at its absolute discretion. When the variable interest entity equity holders make early repayment of the outstanding amount, our wholly-owned entity or a third-party designated by it may purchase the equity interests in the variable interest entity at a price equal to the outstanding amount of the loan, subject to any applicable PRC laws, rules and regulations. The variable interest entity equity holders undertake not to enter into any prohibited transactions in relation to the variable interest entity, including the transfer of any business, material assets, intellectual property rights or equity interests in the variable interest entity to any third-party. The parties to the loan agreement for each of our material variable interest entities are the relevant PRC limited liability company, on the one hand, and Taobao (China) Software Co., Ltd. (淘寶(中國)軟件 有限公司), Zhejiang Tmall Technology Co., Ltd. (浙江天貓技術有限公司), Alibaba (China) Technology Co., Ltd. (阿里巴巴(中國)網絡技術有限公司), Zhejiang Alibaba Cloud Computing Ltd. (浙江阿里巴巴雲計算有限公司) or Beijing Youku Technology Co., Ltd. (北 京優酷科技有限公司), our respective wholly-owned entity, on the other hand.

Exclusive call option agreements

The variable interest entity equity holder has granted our wholly-owned entity an exclusive call option to purchase its equity interest in the variable interest entity at an exercise price equal to the higher of (i) the paid-in registered capital in the variable interest entity; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant variable interest entity has further granted our relevant wholly-owned entity an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted by applicable PRC law, whichever is higher. Following the VIE Structure Enhancement, each relevant variable interest entity and its equity holders will also jointly grant our relevant wholly-owned entity (A) an exclusive call option to request the relevant variable interest entity to decrease its registered capital at an exercise price equal to the higher of (i) the paid-in registered capital in the relevant variable interest entity and (ii) the minimum price as permitted by applicable PRC law, or the capital decrease price, and (B) an exclusive call option to subscribe for the increased capital of relevant variable interest entity at a price equal to the sum of the capital decrease price and the unpaid registered capital, if applicable, as of the capital decrease. Our wholly-owned entity may nominate another entity or individual to purchase the equity interest or assets, or to subscribe for the relevant increased capital, if applicable, under the call options. Execution of each call option shall not violate the applicable PRC laws, rules and regulations. Each variable interest entity equity holders has agreed that the following amounts, to the extent in excess of the original registered capital that they contributed to the variable interest entity (after deduction of relevant tax expenses), belong to and shall be paid to our relevant wholly-owned entities: (i) proceeds from the transfer of its equity interests in the variable interest entity, (ii) proceeds received in connection with a capital decrease in the variable interest entity, and (iii) distributions or liquidation residuals from the disposal of its equity interests in the variable interest entity upon termination or liquidation. Moreover, any profits, distributions or dividends (after deduction of relevant tax expenses) received by the variable interest entity equity holder also belong to and shall be paid to our wholly-owned entity. The exclusive call option agreements remain in effect until the equity interest or assets that are the subject of these agreements are transferred to

– 174 – OUR HISTORY AND CORPORATE STRUCTURE our wholly-owned entity. The parties to the exclusive call option agreement for each of our material variable interest entities are the relevant variable interest entity equity holders, the relevant variable interest entity and its corresponding wholly-owned entity. Apart from legal restrictions on foreign ownership and investment in, among other areas, value-added telecommunications services, which include the operations of ICPs, our right to exercise the call option is not subject to any statutory limitations.

Proxy agreements

Pursuant to the relevant proxy agreement, each of the variable interest entity equity holders irrevocably authorizes any person designated by our wholly-owned entity to exercise his rights as the equity holder of the variable interest entity, including without limitation the right to vote and appoint directors. The parties to the proxy agreement for each of our material variable interest entities are the relevant variable interest entity equity holder, the relevant variable interest entity and its corresponding wholly-owned entity.

Equity pledge agreements

Pursuant to the relevant equity pledge agreement, the relevant variable interest entity equity holders have pledged all of their interests in the equity of the variable interest entity as a continuing first priority security interest in favor of the corresponding wholly-owned entity to secure the outstanding amounts advanced under the relevant loan agreements described above and to secure the performance of obligations by the variable interest entity and/or its equity holders under the other structure contracts. Each wholly-owned entity is entitled to exercise its right to dispose of the variable interest entity equity holders’ pledged interests in the equity of the variable interest entity and has priority in receiving payment by the application of proceeds from the auction or sale of the pledged interests, in the event of any breach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force until the later of (i) the full performance of the contractual arrangements by the relevant parties, and (ii) the full repayment of the loans made to the relevant variable interest entity equity holders. The parties to the equity pledge agreement for each of our material variable interest entities are the relevant variable interest entity equity holders, the relevant variable interest entity and its corresponding wholly-owned entity.

Contracts that Enable Us to Receive Substantially All of the Economic Benefits from the Variable Interest Entities

Exclusive technology services agreements or exclusive services agreements

Each relevant variable interest entity has entered into an exclusive technology services agreement or, following the VIE Structure Enhancement, an exclusive service agreement with the respective wholly-owned entity, pursuant to which our relevant wholly-owned entity provides exclusive services to the variable interest entity. In exchange, the variable interest entity pays a service fee to our wholly-owned entity, the amount of which shall be determined, to the extent permitted by applicable PRC laws as proposed by our wholly- owned entity, resulting in a transfer of substantially all of the profits from the variable interest entity to our wholly-owned entity. We are under no obligation to provide any financial support to the variable interest entity.

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The exclusive call option agreements described above also entitle our wholly-owned entity to all profits, distributions or dividends (after deduction of relevant tax expenses) to be received by the variable interest entity equity holder, and the following amounts, to the extent in excess of the original registered capital that they contributed to the variable interest entity (after deduction of relevant tax expenses) to be received by each variable interest entity equity holder: (i) proceeds from the transfer of its equity interests in the variable interest entity, (ii) proceeds received in connection with a capital decease in the variable interest entity, and (iii) distributions or liquidation residuals from the disposal of its equity interests in the variable interest entity upon termination or liquidation.

In the opinion of Fangda Partners, our PRC legal counsel:

• the ownership structures of our material wholly-owned entities and our material variable interest entities in China do not and will not violate any applicable PRC law, regulation, or rule currently in effect;

• the contractual arrangements between our material variable interest entities, the corresponding wholly-owned entities and the respective equity holders of our material variable interest entities governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and will not violate any applicable PRC law, regulation, or rule currently in effect; and

• the contractual arrangements between our material variable interest entities, the corresponding wholly-owned entities and the respective equity holders of our material variable interest entities governed by PRC laws will not be deemed as “concealment of illegal intentions with a lawful form” and void under the PRC Contract Law.

Furthermore, as of the Latest Practicable Date, we had not encountered any interference or encumbrance from any PRC governing bodies in operating our business through the various variable interest entities under the contractual arrangements.

However, we have been further advised by our PRC legal counsel, Fangda Partners, that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, rules and regulations. Accordingly, the possibility that the PRC regulatory authorities and PRC courts may in the future take a view that is contrary to the opinion of our PRC legal counsel cannot be ruled out. We have been further advised by our PRC legal counsel that if the PRC government finds that the agreements that establish the structure for operating our Internet-based business do not comply with PRC government restrictions on foreign investment in the aforesaid business we engage in, we could be subject to severe penalties including being prohibited from continuing operations. See “Risk Factors — Risks Related to Our Corporate Structure.”

There are certain risks involved in our corporate structure and the contractual arrangements. A detailed discussion of material risks relating to our Contractual Arrangements is set forth in the section headed “Risk Factors — Risks Related to Our Corporate Structure.” We have determined that the costs of insurance for the risks associated with our corporate structure and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Accordingly, as of the Latest Practicable Date, we did not purchase any insurance to cover the risks relating to the contractual arrangements.

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