The Future of E-commerce

December 3, 2014

Disclaimer

This presentation contains forward-looking statements that involve risks and uncertainties, including statements based on our

current expectations, assumptions, estimates and projections about us, our industry and the regulatory environment in which we

and companies integral to our ecosystem operate. These statements involve known and unknown risks, uncertainties and other

factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied

by the forward-looking statements, including those risks, uncertainties and other factors identified in the prospectus under the

sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. In

some cases, these forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,”

“aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The forward-

looking statements included in this presentation may relate to, among others: (a) our growth strategies; (b) our future business

development, financial condition and results of operations; (c) trends in online and mobile commerce, both globally and in the

People’s Republic of China (“PRC”); (d) competition in our industry; (e) fluctuations in general economic and business conditions in

China; (f) expected changes in our revenues and certain cost and expense items and our operating margins; (g) the regulatory

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China; (f) expected changes in our revenues and certain cost and expense items and our operating margins; (g) the regulatory

environment in which we and companies integral to our ecosystem operate; (h) our proposed use of proceeds from this offering;

and (i) assumptions underlying or related to any of the foregoing. The global and PRC Internet, retail, wholesale, online and mobile

commerce, cloud computing and data industries market may not grow at the rates projected by market data, or at all. The failure of

these industries or markets to grow at the projected rates may have a material adverse effect on our business, financial condition

and results of operations and the market price of our securities. If any one or more of the assumptions underlying the market data

turns out to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue

reliance on these forward-looking statements.

Dr. Ming ZENG

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Chief Strategy Officer

11.11 Shopping Festival : 2013 vs 2014

2014(2)2013

Total GMV(1):

vs

RMB 57.1Bn

(US$9.3Bn)

RMB 36.2Bn

(US$5.8Bn)

Time-spending to achieve:

(RMB Bn)

YoY

Growth (%)57.7%

GMV Growth

4

~ 3mins~ 6mins

~ 14mins~ 38mins

~ 38mins> 5 hrs

► RMB 1Bn GMV

Time-spending to achieve:

Note:

(1) All 11.11 GMV settled through Alipay

(2) All 2014 11.11 GMV and other figures are subject to final auditing following conclusion of the event.

36.2

57.1

2013 2014

► RMB 5Bn GMV

► RMB 10Bn GMV

36.20

57.11

GMV on 11.11 Shopping Festival (RMB Bn)

11.11 Shopping Festival : GMV

(1)

0.05 0.943.36

19.10

2009 2010 2011 2012 2013 2014

5

Note:

(1) All 11.11 GMV settled through Alipay

(2) The above 11.11 GMV for 2009 – 2012 are unaudited.

(3) The 11.11 GMV for 2014 is unaudited and is subject to final auditing following conclusion of the event.

What’s going on?

Internet is fundamentally Internet is fundamentally

transforming business in China

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China and U.S. E-commerce Comparison

$297 $339

$298

$395

$488

E-commerce Market (2009A -2015E)

(US$ Bn)

$157 $176

$195 $225

$259

$297

$39 $68

$121

$207

$298

2009A 2010A 2011A 2012A 2013E 2014E 2015E

US China

7

28.9%

34.3%

38.3%

42.1%

45.8% 46.9%

China’s Rapid Internet Growth

China’s Internet population grew >600% over past ten years

China Internet Population and Penetration

(Million) (%)

80 94 111 137210

298384

457513

564618 632

6.2% 7.2% 8.5%

10.5%

16.0%

22.6%

28.9%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Internet User Population Internet Penetration

Source: CNNIC

Note: (1) 2014 Internet population and penetration rate are as of June 30, 2014 8

(1)

Rapid Growth in China’s Online Shoppers

28.1%

35.1%

37.9%

42.9%

48.9%

52.5%

China Online Shopper Population and Penetration

(Million) %

China’s online shoppers population has grown tremendously

9

34 46 74108

161194

242302

332

24.5%22.2%

24.8%28.1%

2006 2007 2008 2009 2010 2011 2012 2013 2014

No. of Online Shoppers Online Shopper Penetration

Source: CNNIC

Note: (1) 2014 Internet population and penetration rate are as of June 30, 2014

(1)

China’s Retail Infrastructure is Weak…

3,810

3,22223.9

Shopping Mall Penetration

2013

Population1,361MM50.2MM317.3MM65.8MM

► Shopping malls in China are much less prevalent than in developed countries

► Vast China’s population is greatly underserved!

1,570

368

12.0

7.3

2.4

France U.S. South Korea China

No. of Shopping Malls Malls per Million People

10Source:

(1) Population - INSEE, Korean Statistical Information Service, United States Census Bureau, Statistics Korea, National Bureau of Statistics of China

…but Internet Infrastructure is Strong

China’s Internet penetration rate

(46%) approaches that of

developed countries…

…but the scale of retailer

concentration lags far behind.

UK

France

Germany

South Korea

USA

E-commerce steps in to fill the gap!

0% 20% 40% 60% 80% 100%

USA

Japan

Brazil

China (Urban)

India

Retailer Concentration Internet Penetration (%/Population)

11

The Big Bang of Taobao

(RMB Bn)

Taobao’s GMV growth in a decade

663

1,077

1,6781,678

GMV (Taobao Marketplace + Tmall)

12

For 12M

ended March

1 7 14 42 98183

329

663

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2012Total GMV

► With Taobao growing so fast, many third-party services flourished (e.g. logistics providers, IT services)

► Instead of converting Taobao to a traditional B2C model, we

A New Model: E-commerce Ecosystem

Instead of converting Taobao to a traditional B2C model, we recognized the power of an eco-system approach and made that our strategy in 2008

► The core of the eco-system is a dynamic market built on Internet and Big Data

► Eventually, every step of the business process will be transformed, from advertising, to sales, to distribution, to logistics, to supply chain.

► This will not merely be the “digitization” of each piece, but rather an

And it keeps evolving…

► This will not merely be the “digitization” of each piece, but rather an end-to-end reinvention of a native e-business model.

The Future: C2B

Mass Customization / Mass Customization /

Personalization Personalization

Consumer Centric/DrivenConsumer Centric/Driven

Consumers are much more empowered

Direct links between consumer-business

From Supply Chain From Supply Chain

Management to Value Management to Value

Network CoordinationNetwork Coordination

RealReal--time time

Data Sharing Data Sharing

► C2B

► Customization

► Differentiation

► Value

Industry versus information Economy

Industry Economy Information Economy

► B2C

► Standardization

► Mass production

► Low Cost vs► Value

► Network

► Social Collaboration

► Self Organizing

► Low Cost

► Assembly Line

► Supply Chain

► Hierarchy

vs

Web Web ‧‧‧‧‧‧‧‧ EcologicalEcological‧‧‧‧‧‧‧‧ EnableEnableLinearLinear‧‧‧‧‧‧‧‧MechanicalMechanical‧‧‧‧‧‧‧‧ ControlControl

The Future of Business

A ParadigmA Paradigm ShiftShift

B2C C2B Industry Information

Emerging China

Model

Emerging

Markets

Model

Impact to developed B2C models?