Investments • Acquisitions • Capital AllocationJoe Tsai, Executive Vice Chairman

M&A and Investment Philosophy

The Art of GO:

Assets on theChessboard are Networked

M&A and Investment Rationale:

To Build Long-termStrategic Value to Alibaba

®

What Drives Our M&A and Investments?

Our Own Business Strategy

Future Technology and Trends

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M&A AND INVESTMENT AT

ALIBABA

Focus on synergies with Alibaba

Success or failure depends on People + Innovation Business team ownership is a must: innovation and transformation drive value creation

Outcomes are likely binary

Integration is Key to Strategic M&A

STRATEGIC GOALS

Improve Customer Experience ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

User Acquisition and New User Profiles ✔ ✔ ✔ ✔

Geography Expansion ✔ ✔ ✔

New Retail ✔ ✔ ✔ ✔ ✔

Strategic Goals of M&A and InvestmentsSanjiangAutoNavi

Align interests of management team

to expected outcomes and retain good people

Not part of our core business, but generate strategic

synergies through an equity relationship

Clear strategic value, but capital or integration risk in the near term

suggests a deliberate and phased-in approach

We choose to make minority investments in some circumstances instead of full acquisitions for the following reasons:

Minority Investments vs Controlling-Stake Acquisitions

How We Think About Valuation

VALUATIONPRICE VALUE≠ ≠

COMPANY TYPE OF INVESTMENT TOTAL INVESTMENT

YEAR OF LATEST INVESTMENT STRATEGIC AREAS

Acquisition (98%) $5.5B(1) FY17 Digital Media and Entertainment

Investment (20%) $2.0B(4)(9) FY17 Electronics category

Investment (47%) $1.0B(5)(9) FY16 LogisticsAcquisition (74%(6)) and Investments (35%(6), 18%(6)) $2.7B(2)(9) FY18 New Retail

Investments (38%(3) and 23%(3)) $1.6B FY18 Local O2O services

Investment (31%(7)) $1.2B FY17 Social mediaAcquisition (54%) and Investments (9%(3), 36%(3)) $1.5B FY17 Southeast Asia and India

$15.5B

Notes:1. Includes Alibaba’s initial investment in Youku

Tudou in FY14 2. Based on most likely investment amount for

Intime, Sanjiang, Lianhua upon deal completion.3. On a fully-diluted basis4. Net cash outlay of $2.0bn as Suning subscribed

for $2.1bn of Alibaba shares while Alibaba invested a total of $4.1B in Suning

5. Includes three rounds of investments in FY14, FY15 and FY16

6. After deal completion7. Includes Alibaba’s investment in Weibo in FY14

and FY158. For the period from April 2015 to Mar 2017 as

well as investments in Intime, Lianhua, and additional investments in Sanjiang and Ele.me assuming the transactions close in FY18

9. Using exchange rate $1= RMB6.9 at Mar 31, 2017

Strategic Uses of Capital

Strategic investments over the last 2 years totaled $21B(8)

Large Minority Investments Have Yielded >4x Return

Valu

e Ax

is

0

5000

10000

15000

20000

Cash Cost Balance Sheet Carrying Value Fair Value

MeituanMomoAlibaba PicturesCainiaoKoubeiDidi ChuxingWeibo

$4.1B

$8.6B

$18.3B> 4x returnnotes: 1. The carrying value of Alibaba Pictures

includes a non-cash dilution gain of $3.6 billion as a result of deconsolidation of Alibaba Pictures from a financing transaction in FY16.

2. Partial stakes in Meituan and Momo have been disposed of. Figures are presented on a pro forma basis as follows: cash cost = original cash cost before disposal; carrying value = cash cost for Meituan and fair value for Momo, according to standard accounting treatment; fair value =realized disposal proceeds + fair value of remaining stakes.

3. Fair market value based on market price as of May 31, 2017, or valuation implied by recent equity financing

4. Balance sheet carrying value as of Mar 31, 2017 for equity and cost method investments and as of May 31, 2017 for available-for-sale securities.

5. Using exchange rate $1= RMB6.8 at May 31, 2017

USD in millions(5)

Cash Cost Balance Sheet Carrying Value(4) Fair Value(3)

Weibo 1,066 932 4,995Didi Chuxing 593 651 3,181Koubei 459 205 3,041Cainiao 1,025 955 2,769Alibaba Pictures(1) 706 4,413 2,166Momo(2) 81 1,259 1,259Meituan(2) 140 140 873Total 4,070 8,555 18,284

$5.1B of Share Repurchases Over the Past 2 Years, or 3% of Diluted Share Count (1) (2)

Notes: (1) Includes Alibaba repurchase of $2 billion of shares from

Softbank in 2016(2) Diluted share count during Dec 2016 quarter(3) Current value based on BABA share price as of June 7, 2017

Share Repurchases

$2.4B$2.7B

CY 2015 CY 2016

$4.1B of Value Creation (3)

Repurchase Amount Current Value of Shares

$9.2B

$5.1B