Letter from Alibaba Chairman and CEO to Investors

Letter from the Chairman and CEO of the Board of Directors to Investors

Dear Investors:

Thank you for your interest and support for Alibaba Group. We launched our listing in Hong Kong today, a new starting point for 20-year-old Alibaba. Today the world has entered the digital economy, a great era, full of changes, challenges and opportunities.

Letter from Alibaba Chairman and CEO to Investors

Be a good company for 102 years

Alibaba is a mission, vision, values-driven company. Alibaba’s cultural pulp comes from our belief in the beauty of people and society. In recent years we have been thinking about the advent of the digital economy, what can change, what can not be changed. At Alibaba’s 20th anniversary celebration on September 10th, we announced Alibaba’s mission, vision and values for the future. Our mission of “No Hard Business” was not changed when we started, and our vision of “becoming a company that has lived for 102 years” was upgraded – we wanted to “be a good company to live for 102 years”. Alibaba does not seek to become a “big company”, do not pursue to become a “strong company”, we hope to become a “good company”, for the community to bring positive energy, assume more social responsibility, for small and medium-sized enterprises to serve, recognized by employees, so that shareholders are satisfied with the good company.

At the same time, we have also upgraded Ali’s values to the “Six Pulses Sword”. From six words to six Ali’s native words, each of which is born out of a story of Ali’s history, represents Alibaba’s cultural attitude and choice. They are:

  • Customer first, employee second, shareholder stake third;
  • Because of trust, so simple;
  • The only constant is change;
  • Today’s best performance is tomorrow’s minimum requirements;
  • At this moment, not me;
  • Live seriously and work happily.

Culture is Alibaba’s basic value orientation, but also to lead Alibaba from zero to today’s driving force. No matter how the world changes, we can only move forward for the future if we stick to our first thoughts.

The Era of the Digital Economy Opens a New Business Civilization

The most striking sign of the digital economy is that the Internet is integrating with industry, agriculture, services, social and public services. This has also given birth to the development of a new commercial civilization. The commercial civilization in the digital economy era is based on openness, sharing, cooperation and win-win situation, and returns from the traditional sense of business zero-sum game to the attention and value creation of customers. The opportunities offered by digital technology can be shared more inclusively by society and better promoted for sustainable development. Alibaba hopes to make its own contribution to creating a new business civilization in the digital economy era through its exploration and practice.

After 20 years of development, Alibaba has developed from an e-commerce company in its inception into a new outline of the digital economy era of digital economy infrastructure, such as digital commerce, digital finance, smart logistics, cloud computing big data, and thus formed a unique digital economy ecosystem. Together with the vast number of partners in this digital economic ecosystem, we serve both consumers and industries, creating and stimulating the rise of new consumption, but also working to serve all walks of life to complete the digital transformation and upgrading of the industry. We hope to help thousands of small and medium-sized enterprises grow, but also encourage the development of new unicorns and small giants. Under the big trees can grow small grass, but also can let more grass grow into a large tree.

General goals and strategies for the future

On the 20th anniversary of Alibaba in September, we have announced our overall strategic goal for the next five years: to serve global consumers, of whom more than 1 billion are Chinese, and to generate more than 10 trillion yuan in consumption. This is our long-term strategic goal: to serve 2 billion consumers worldwide by 2036, create 100 million jobs and help 10 million Small and Medium-sized businesses make a profit at the necessary stage and the solid foundation needed to be built.

To achieve our strategic goals, we will continue to pursue three major strategies: globalization, domestic demand, big data, and cloud computing.

Globalization is Ali’s future. We firmly believe that the combination of digital technology and commerce brings about chemical reactions, and there is no borders. The wide application of digital technology in business, finance, logistics and other fields will greatly enhance the trade efficiency between different countries and different markets, so that the whole “world” is not difficult to do business. We will continue to promote the development and prosperity of the global digital economy ecology by starting with global buying, global selling, global payment, global transportation, global play, etc.

Domestic demand is the future of China’s economy. China’s economy is transforming from an investment- and export-led economy into a consumption-driven economy. Today, on Alibaba’s China retail platform, mobile monthly active users reached 785 million, they are China’s most active, youngest, representative of the future consumer power. The ongoing urbanization of rural areas in China, the emergence of hundreds of millions of middle-class families, and the emergence of all consumers as Internet users have great potential for consumption growth and new possibilities for using digital technology to create consumption growth. We hope to meet the different levels of consumer demand through the supply of diversified goods and services. Not only that, but we also want to be able to drive supply-side changes, driven by big data, and connect the market directly through innovative supply to create new consumer demand.

Big data and cloud computing are the oil and engine of the digital economy. Alibaba’s digital economy infrastructure not only produces data, but also allows the ecology to flourish and develop because of its wide spread. We believe that in the digital economy, computing power is becoming the productivity of a new generation. In the future, all businesses will become new Internet companies, big data-driven companies. Alibaba faces a broad opportunity, not an upgrade of one industry, but an upgrade of all industries. That’s why we’re pushing ahead with Alibaba’s commercial operating system: opening Alibaba’s business, finance, logistics, cloud computing and other infrastructure to all customers and partners in the digital economy to help them become digital and intelligent.

Cultural persistence and the creation of the future

Culture is the cornerstone of Alibaba, and innovation is Alibaba’s gene. After ten years of exploration, Alibaba has created and developed a unique partnership system, we will adhere to the partner governance mechanism to ensure the heritage of our culture, as well as the mission, vision, values of adherence. On September 10 this year, we completed a comprehensive upgrade of our management team, which is an important step for us to move forward for the future. We believe in constant innovation, self-challenge and even self-subversion in this rapidly changing world. Talent is Alibaba’s most valuable asset. We need to keep coming forward with future wind-makers. We will allow more young people to create and try, to get more women to take on important positions and to develop more global talent. We create soil, so that our employees are caring for society, curious about the future, so that the world because of our creation of a more warm and bright color.

Back to Hong Kong

When Alibaba first went public in 2014, it missed out on Hong Kong. Hong Kong is one of the most important financial centres in the world. Over the past few years, Hong Kong’s capital markets have undergone many encouraging and significant reforms. At a time of great changes in Hong Kong society, we remain confident in the future of Hong Kong. We hope to contribute our own efforts and actively participate in the future construction of Hong Kong.

Thank you again for your interest in and participation in Alibaba’s development. Because believe, so see, the future belongs to the “believe” people, Alibaba will continue to work hard!

Zhang Yong

Chairman and CEO of Alibaba Group

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