Annual Report 2009 - Alibaba

online through Alibaba.com’s wholesale platform. The wholesale
transaction platform’s power was complemented by our Net
Products Trade Fairs in Guangzhou, Hangzhou and Chengdu
in 2009. These campaigns helped to reinforce the message
of the cross-platform relationships between the two largest
e-commerce marketplaces in business and consumer areas in
China. Monetization will follow after we have grown the activities
and usage of the wholesale platform into a reasonably large
size.
There is strong cooperation between Alibaba.com and Alipay,
another sister company. During the year, to facilitate online
transactions on both international marketplace and China
marketplace, we brought Alipay on board to become the key
online payment method on our China wholesale platform and
provide escrow services for transactions on AliExpress. Alipay,
the dominant online payment platform in China, bolstered trust
and safety for transactions on our marketplaces. Going forward,
together with Alipay, we will continue to enhance the payment
mechanism to make it more suitable for business customers.
In addition, the Ali-Loan program, where we have partnered
with Alibaba Group and various banks, continues to develop
and assist our small business customers obtain muchneeded
capital. We believe Alibaba.com plays a unique role in
connecting small businesses and banks to facilitate their loan
transactions. As of December 31, 2009, more than 3,000 of
our paying members have already benefi ted from this program
with our partner banks collectively issuing more than RMB6
billion in loans to them. In October 2009, we extended the
Ali-Loan program to Beijing, Guangdong Province and Jiangsu
Province. We plan for more expansion in 2010 to cover small
businesses’ fi nancing needs. Even though this is a non-traderelated
VAS, we believe this well-demanded service undoubtedly
increases member’s stickiness on our platform. While we are
very confi dent about the long-term benefi t that this program can
bring to our customers and our partner banks, we do not see
this as a short-term revenue driver for our business.
Alibaba.com’s 10th anniversary and our new
business structure
In September 2009, we celebrated the 10th anniversary of
Alibaba.com and at this event unveiled more about our view
on the development of e-commerce in the coming decade.
Our past 10 years have proved the power of e-commerce
to generate business opportunities for small businesses and
entrepreneurs. In the coming 10 years, we believe e-commerce
can achieve much more beyond serving the sales and marketing
function of suppliers. Our vision is to solve the challenges
of small businesses in procurement, sales and marketing,
operation management and fi nancing through technology. To
ensure the realization of this vision in the coming decade, we
have reorganized our business initiatives into the following
business units: the International Core Business Unit (“ICBU”),
the China Core Business Unit (“CCBU”), the Information
Technology Business Unit (“ITBU”) and Ali-Institute. ICBU
and CCBU are continuations of our existing international
marketplace and China marketplace, respectively. ITBU and
Ali-Institute are new divisions that will help small businesses get
better access to technology to upgrade their operations, as well
as train personnel in these small businesses on how to better
use the technology.
ITBU
Since our announcement of the new business structure, we
have made signifi cant developments in business initiatives
relating to these new business units. In August 2009, Alibaba.
com acquired the business management software division of
Alisoft from Alibaba Group. This Internet-based, SaaS, model
provides small businesses with low-cost, user-friendly enterprise
and fi nancial management tools and drives usage of technology
to manage their operations. Also in the fourth quarter of 2009,
we completed our acquisition of HiChina Web Solutions, the
leading provider of Internet infrastructure services in China. With
the acquisition of HiChina, Alibaba.com gained four key assets:
a large new customer base, new value-added applications,
advanced and automated “do-it-yourself” website technology,
and a strong management and operating team. We saw the
strong strategic fi t in both acquisitions and are confi dent that
these businesses will create signifi cant operating synergies. With
these two acquisitions, we believe ITBU solutions will offer our
members added competitiveness and fl exibility in e-commerce
while also providing them with a growing platform where they
can truly “Work at Alibaba.”
Ali-Institute
We established Ali-Institute as a stand-alone business unit in
the fourth quarter of 2009. Through its curriculum, Ali-Institute
will serve as an important incubator for e-commerce talent in
China, creating a pool of qualifi ed people for small businesses
to recruit from to run their growing e-commerce operations.
As an additional benefi t, we have seen strong evidence that
Ali-Institute will help enhance the employment rate of new
university graduates, with the fi rst group of approximately
300 students from Ali-Institute securing job opportunities
immediately upon graduation. Through a combination of offl ine
classroom and online training, Ali-Institute aims to train people
to fi ll the widening gap in the demand for e-commerce talent.
New corporate campus in Hangzhou
In September 2009, we moved from our old offi ces located in
several buildings near the center of Hangzhou, China to our
new corporate campus in the Binjiang district of Hangzhou.
Construction of the campus was completed in two years, on
time and below our original budget due to our effective cost
control. Now all our business units can work together at this
new campus, and we believe this will further enhance our
operational effi ciency.
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