September 23-24, 2019 Hangzhou, China Financial and Investment Perspectives Maggie WU, CFO of Alibaba Group 1 FINANCIAL UPDATE STRATEGIC INVESTMENT VALUATION 2 FINANCIAL UPDATE 1. Unrivalled Growth 2. Efficiency Gains 3. Invest for Future 3 Users & Consumers Revenue Profitability & Cash Flow US$59.8 bn (3) 46.2% Financial Highlights for Total YoY Revenue Growth (1) Last Twelve Months (3)(4) 755 mn Core Commerce Cloud Computing US$16.8 bn (2) Mobile MAUs Adjusted EBITA (3)(4) 674 mn US$15.2 bn Annual Active Non-GAAP Free Cash Flow Consumers (“AAC”) 47.3% 77.5% Notes: YoY Revenue Growth YoY Revenue Growth 1. For the last twelve months (“LTM”) ended June 30, 2019, unless stated otherwise. 2. For the month ended June 30, 2019. 3. Translations of RMB into US$ were made at RMB6.8650 to US$1.00. 4 4. Please refer to 20-F for reconciliations between GAAP and non-GAAP measures. Last Twelve Months Revenue Growth(1) 5-Year Revenue Growth(3) 46% 7.1x Robust Revenue Growth 6.3x 37%(2) Outperforming Global Technology Peers 29% 4.8x 22% 21% 20% 3.1x 14% 2.3x 1.4x Notes: 1. LTM ended June 30, 2019 for all companies according to public filings. 2. Revenue growth excluding the effects of consolidating acquired businesses, which primarily consists of Ele.me, Cainiao, Trendyol, Koubei and Alibaba Pictures. 3. 5-year revenue growth equals revenue in LTM ended June 30, 2019 divided by revenue in LTM ended 5 June 30, 2014. Group Total Marketplace-based Core Commerce Adjusted EBITA (RMB bn) Adjusted EBITA (RMB bn) （US$24.1bn)(1) (1) 161.6 Healthy Profitability 3-year CAGR: 30% （US$15.9bn) 3-year CAGR: 41% 107.0 Strong Core 97.0 122.9 69.2 82.4 48.6 58.0 Notes: (2) (2) 1. Translations of RMB into US$ were made at RMB6.7112 to US$1.00. FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 2. Core commerce adjusted EBITA are presented for FY16 and FY17. We only started 6 disclosing marketplace-based core commerce adjusted EBITA in FY18. 34% 33% 34% B2C Market Leadership 30% 29% 26% Expansion 24% 21% 21% 22% Tmall Physical Goods GMV YoY Growth (1) (Excluding Unpaid Orders) China Online Physical Goods Retail Sales YoY Growth(1)(2) Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 Jun 30, 2019 Notes: 7 1. For the quarter ended on the respective dates. 2. Source: National Bureau of Statistics of China (“NBS”). Significant Contribution to China Consumption Growth Driver for China FY18 FY19 China Retail Consumption(1) Growth in Consumption Growth RMB37,071 bn RMB38,850 bn FY19: +RMB1,779 bn >50% Alibaba China Retail Marketplaces GMV RMB4,820 bn RMB5,727 bn Growth in FY19: +RMB907 bn Note: 8 1. Source: NBS. Include online and offline physical goods and offline virtual goods. Consumers with Annual Spending > RMB10,000 LTM ended June 30, 2018 LTM ended June 30, 2019 High Value, High Retention 100 mn+ 130 mn+ Consumers Consumers 98%+ 98%+ (1) (1) Retention Rate Retention Rate Note: 1. Consumers with spending more than RMB10,000 in the prior LTM continued to spend during the 9 respective periods as indicated. FY19 Average Annual Spending per Consumer in Less Developed Areas Longer Consumers Stay, RMB ~10.6K Higher Their Spending RMB ~6.7K RMB ~2.3K Consumer Cohort 1 Year 3 Years 5 Years 10 Greater Synergy User Referral Higher Frequency Higher Stickiness 38% Ele.me New Consumers Users on 5 Platforms Are ~3x Average Spending per 88VIP Member (1) Ensures User Loyalty Come from Alipay App (2) (3) More Active than Single Platform Users ~9x of Overall Users Notes: 1. For the quarter ended June 30, 2019. 11 2. For the month ended June 30, 2019. 3. For the LTM ended June 30, 2019. Paying Merchants Retained % of Paying Merchants Achieved on Our Platform(1) 20%+ YoY Sales Growth(1) For More than 1 Year Value Creation for China Retail Marketplaces Merchants 63% 50% Note: 12 1. For paying merchants in LTM ended June 30, 2019. Revenue Costs of Inventory & Logistics Distribution Costs Branding & Marketing Expenses RD & IT Expenses Other Operating Expenses Financing Costs Value Creation (1) 短视频 throughout Merchants' P&L (2) 28 mn (3) Notes: 3.5 mn Paying Merchants Active Merchants 1. Not our consolidated business. 2. Number of paying merchants for LTM ended June 30, 2019. 3. Merchants who have used digital finance services provided by Ant 13 Financial for LTM ended June 30, 2019. No.1 Public Cloud Provider by Expanded China PaaS Cloud % of China Listed Companies (3) (1) (2) Market Share in China Market Share on Alibaba Cloud Alibaba Cloud 59% 49% Enterprise Market Leader 25% 23% 43% 42% 5% 5% 7% 6% 7% 12% 12% 12% August 2018 August 2019 Notes: Alibaba Cloud 1. Source: IDC Public Cloud Service Tracker, March quarter 2019. 2. Source: IDC, 2018H2. 14 3. Includes companies listed on Shanghai Stock Exchange, Shenzhen Stock Exchange and ChiNext. FINANCIAL UPDATE 1. Unrivalled Growth 2. Efficiency Gains 3. Invest for Future 15 Sales and Marketing Spending for Each Dollar of Revenue(1) Efficiency Gains on US$0.11 Consumer Acquisition US$0.09 Note: 1. Calculated by total sales and marketing expenses divided by total June Quarter 2018 June Quarter 2019 revenue as presented in the consolidated income statements. 16 16 Moderate Headcount Growth Significant Revenue Growth (RMB bn) 115 YoY Growth: 42% 104K Efficiency Gains YoY Growth: 19% 81 87K on Productivity June 30, 2018 June 30, 2019 June Quarter 2018 June Quarter 2019 17 17 Acquisition of Licensed Copyrights Content Cost as % of Digital Media and and Other Intangible Assets Entertainment Revenue (RMB bn) Efficiency Gains on Content Acquisition 4.8 2.4 June Quarter 2018 June Quarter 2019 June Quarter 2018 June Quarter 2019 The Longest Day in Wolf Warrior II Street Dance of China Green Book Chang'an 18 18 June Quarter 2018 June Quarter 2019 RMB 47bn 27% YoY +RMB10bn RMB 6bn RMB 41bn RMB 37bn 25% YoY RMB 6bn RMB 35bn Efficiency Gains RMB 4bn RMB 33bn +RMB8bn 30% YoY +RMB8bn Lead to Profitability RMB 6bn RMB 27bn Marketplace- Loss from Loss from Marketplace- Loss from Loss from based Core based Core Improvements 1. International: Lazada A. Cloud Computing 1. Local Consumer Services A. Cloud Computing Commerce Core Commerce Commerce Core Commerce 2. Local Consumer Services B. Digital Media 2. International: Lazada B. Digital Media Adjusted EBITA Adjusted EBITA Adjusted EBITA Adjusted EBITA Adjusted EBITA 3. New Retail & Direct Import and Entertainment Adjusted EBITA 3. New Retail & Direct Import and Entertainment 4. Logistics: Cainiao C. Innovation Initiatives 4. Logistics: Cainiao C. Innovation Initiatives & Others & Others D. Unallocated D. Unallocated 19 19 FINANCIAL UPDATE 1. Unrivalled Growth 2. Efficiency Gains 3. Invest for Future 20 Digital Media & Entertainment Local Consumer Services Innovation Initiatives 100 mn 40% 40% DAUs in Oct 2018 (2) YoY Growth of Average GMV YoY Growth Significant Growth Daily Subscribers (1) and Progress in 200 mn Major Investments Registered Users(4) International Commerce Retail Cainiao Logistics Services 100%+ 100%+ Cainiao Post: (3) Devices Sold Notes: (1) Daily Package YoY Growth 10 mn Lazada DAUs YoY Growth within 18 Months since Launch 1. For June Quarter 2019. Cainiao Guoguo: 2. Represents local consumer services GMV YoY growth, including Ele.me, Xingxuan Package Volume YoY Growth (3) and Koubei, for the twelve months ended June 30, 2019 vs June 30, 2018. 3. For the month ended June 30, 2019. 21 4. As of August 31, 2019. STRATEGIC INVESTMENT 22 Our M&A and Investment Strategies Strategic Investment Greater Emphasis Portfolio Review Continues on Synergies Disciplined Monitoring 23 Solidify Core Business Identify New 1 2 Globalization 3 Goals of Our M&A Market Position Technology Trends and Investments(1) daraz 24 Note: 1. Selected investments since FY2018. +6.5% Supply Chain & Products Synergy 485 Digitalized Stores(1) Percent of Online Revenue After Integration of Taoxianda(2) Greater Emphasis O2O Integration for Enhanced User 56 Same City Online Site Starts Experience Malls Connected to to Offer Local Delivery and on Synergies (3) Digital Operation System Installation Services Case Studies >50mn Thriving e-Commerce Ecosystem 128% Annual Active (5) YoY Order Growth Consumers in SE Asia(4) Notes: 1. As of June 30, 2019. 2. For the month ended August 31, 2019. 3. As of August 31, 2019 for Easyhome. 4. Annual Active Consumers of Lazada across Indonesia, Malaysia, the Continuous Technology Innovation 10x 50% Philippines, Singapore, Thailand and Vietnam ended August 31, 2019. Ali-NPU Performance (6) 5. Order volume growth in June Quarter 2019. Cost Reduced 25 6. For August 2019. Improvement(6) Portfolio Review with 50+ Disciplined Monitoring Divestments since IPO ~RMB18bn Total Net Gains 26 26 VALUATION 27 Valuation Framework CORE COMMERCE DIGITAL MEDIA & INNOVATION INITIATIVES CLOUD COMPUTING Strategic Investments MARKETPLACE-BASED CORE COMMERCE(1) INTERNATIONAL LOCAL SERVICES NEW RETAIL LOGISTICS ENTERTAINMENT & OTHERS Notes: (1) (1) 1. Unless stated otherwise, translations of RMB ADJUSTED EBITA (USD MN) REVENUE (USD MN) into US$ were made at RMB6.7112 to US$1.00. 2. Translations of RMB into US$ were made at RMB6.8650 to US$1.00. (2) (2)(3) 3. Represents “Others” revenue under China 900 2,440 FY19: 2,218 commerce retail, which is primarily generated FY19: 24,078 FY19: 2,914 (For June Quarter 2019) (For June Quarter 2019) FY19: 3,681 FY19: 3,588 FY19: 695 by New Retail and direct sales businesses, mainly Freshippo, Tmall Supermarket, Tmall Direct Import and Intime. 4. We started to consolidate Ele.me in May 2018 31% YoY Growth 38% YoY Growth 137% 134% 120% 84% YoY Growth 23% YoY Growth 42% YoY Growth and Koubei in December 2018.