History of Alibaba: From a Hangzhou Apartment to Ecommerce Megalith

Spanning just 25 years, Alibaba’s history is packed full of twists and turns, innovation, and bold moves into new markets. Starting in 1999 in the Hangzhou apartment of Jack Ma, Alibaba has grown from a website to help Chinese merchants with quick and easy imports and exports to a multinational conglomerate that operates across a wide range of industries.

In this article, the Business2Community team shares a comprehensive tour of Alibaba’s history to date. We’ve scoured a wide range of reliable sources to give you an insight into how Alibaba has developed to become the global giant it is today.

Who Owns Alibaba?

Alibaba Group is a publicly traded company, listed on the New York Stock Exchange. At the time of writing, its largest shareholders are its founder Jack Ma who owns between 4-5%, and vice-chair, Joseph Tsai who personally owned 1.4% of the company in the 2023 annual reports. Around 15% of the organization’s shares are owned by institutional investors such as Primecap Management and Dodge and Cox.

In 2019, Alibaba raised $12.9 billion in a secondary listing on the Stock Exchange of Hong Kong. The initial public offering (IPO) included a total of 500,000,000 new ordinary shares and was the largest IPO to take place in 2019.

Alibaba was founded by Jack Ma and 18 of his friends in 1999 with an ambition to connect Chinese manufacturers with buyers – both retail and wholesale – around the world. The first marketplace venture for the group, Alibaba.com, became the world’s largest business-to-business online trading platform for smaller companies by 2014.

The organization now lists three strategic areas of operation: consumption, cloud, and globalization. Under these areas, it operates across several distinct markets:

• China commerce – including Taobao, TMall, and 1688.com
• International commerce – including Alibaba.com, AliExpress, and Lazada
• Local consumer services
• Digital media and entertainment
• Innovation initiatives
• Logistics
• Cloud services

Alibaba relocated its global headquarters to the Yu Hang District of Hangzhou in 2013. Its China headquarters are in Wuhan.

Who is the Alibaba CEO?

Eddie Wu took the top job as CEO of Alibaba in September 2023. As one of the company’s co-founders, Wu has extensive experience in its core business of ecommerce, as well as technology and monetization. Wu succeeded Daniel Zhang.

Following the company’s 2023 restructuring into six business units, Wu was appointed chairman of the Taobao and Tmall Group. He also served as chief technology officer of Taobao and Alipay, a mobile payments service.

Here’s a full rundown of everyone who’s served as CEO:

Growth and Development of Alibaba

Alibaba has been in existence for just a little over a quarter of a century, but in that time it has seen rapid growth and expansion into a range of industries.

Here we run through some of the key highlights in the company’s story so far.

1999-2014: Alibaba Leads the Global and Domestic Ecommerce Market

Alibaba came from humble beginnings in Jack Ma’s Hangzhou apartment. Here, Ma assembled 18 friends who believed that the internet revolution would allow small businesses to employ innovation and new technology to grow and compete, both globally and domestically. They had a shared vision of building an online marketplace, much like the emerging Amazon and eBay in the USA, that would help Chinese merchants access buyers across the globe.

By early 2000, the team had secured $25 million in investment from the Masayoshi Son-owned SoftBank, Goldman Sachs, and Investor AB. By 2002, just three years after launching its website, Alibaba.com had turned its first profit.

In 2003, Alibaba started the Chinese online shopping platform Taobao. Many believed that the move was in direct response to eBay’s acquisition of Chinese digital auction house EachNet. The new platform was primarily intended as a digital marketplace for small enterprises and individual sellers to sell directly to customers in Chinese-speaking regions, including mainland China, Hong Kong, Macau, and Taiwan. Ma is quoted as saying:

eBay may be a shark in the ocean, but I am a crocodile in the Yangtze River

Taobao was designed to offer shoppers an engaging, personalized shopping experience, fueled by data analytics and technology. Consumers can also communicate with each other and their favorite sellers through interactive features such as live streaming, video clips, and instant messaging. Also in 2003, Alipay was added to the marketplace to offer customers a third-party mobile and digital payments platform.

Taobao outperformed eBay in China, claiming a growing percentage of Chinese consumers. By 2006, eBay announced that it would be withdrawing from the Chinese market and closing its unprofitable China Web unit. Taobao has only continue to grow since. According to Analysys, the Taobao marketplace was the country’s biggest digital retail platform during the fiscal year 2021-2022.

In 2004, Softbank led a consortium investment of over $82 million in what was the largest ever private equity commitment in the Chinese online sector. In 2005, Yahoo! bought a 40% stake in Alibaba for $1 billion, making it the organization’s largest shareholder. In 2012, a consortium of Chinese investors bought out Yahoo!’s controlling stake.

Alimama, the organization’s online marketing and advertising platform, was launched in 2007 to help smaller online businesses monetize their web traffic. In the same year, Alibaba.com went public on the Hong Kong Stock Exchange, only to be delisted once again in 2012 in a business-led decision.

To offer a more diverse shopping experience for customers, in 2008 Tmall was launched. Tmall is a retail platform for Chinese customers to purchase directly from global brands. Many international and Chinese businesses and brands run successful storefronts on Tmall. Less than 20 years on, Tmall became the world’s largest third-party ecommerce platform for brands and retailers.

In 2009, Alibaba Cloud was launched to serve as the company’s digital technology and intelligence arm. It offers cloud computing services to customers worldwide, including servers, storage, security solutions, and databases. Alibaba is reportedly the world’s third largest infrastructure-as-a-service provider by revenue, ahead of even the global titan Google.

The company’s move into cloud computing was soon followed by another ecommerce venture. Launched in 2010, AliExpress is a global marketplace that supports international buyers to shop directly with Chinese companies and global merchants. AliExpress has grown a strong customer base in the USA, Brazil, France, and Spain. The platform is available in 17 languages, including French, Portuguese, and Spanish.

In 2013, co-founder Jack Ma stepped down as CEO to be replaced by Daniel Zhang.

Also in 2013, Alibaba partnered with several large Chinese logistics companies to establish Cainiao for package delivery across China. The network grew to encompass 14 local logistics companies by 2014.

2014-2024: The World’s Biggest IPO Marks the Start of a New Chapter

In 2014, Alibaba announced plans to list the business on the New York Stock Exchange. It went public in September that year, priced at $68 per share. The offering raised $25 billion, making it the world’s biggest IPO.

In 2014, Alipay moved into the newly formed Ant Financial Services Group. Ant Financial was created to serve as a parent company for Alipay and several other financial services, including loans and wealth management. It was rebranded as Ant Group in 2002.

The Chinese government blocked Ant Group’s dual IPO in Shanghai and Hong Kong in November 2020, which had been set to raise a record $37 billion. As of 2021, Ant Group was the biggest Chinese payments provider, with more than 730 million monthly users on Alipay.

Alibaba closed out the 2016 fiscal year with more than ¥3 trillion (approx. $66 billion) gross merchandise volume (GMV) on its Chinese platforms to become the largest retail commerce company in the world in terms of GMV.

In January 2017, Alibaba agreed to an $800 million digital partnership with the International Olympic Committee (IOC) for the company to sponsor and supply its digital and ecommerce services in support of the Olympic Games until 2028.

With an ambition to expand into Southeast Asia, Alibaba acquired a controlling stake in the region’s ecommerce leader, Lazada, for a reported $1 billion in 2016. In 2017, the company announced a further $1 billion investment, taking its stake from 51% to 83%. In 2018, Alibaba invested a further $2 billion in Lazada and bought Daraz Group, a leading ecommerce company in Bangladesh, Myanmar, Nepal, Pakistan, and Sri Lanka.

In 2019, Alibaba announced a secondary listing on the Stock Exchange of Hong Kong and began to build a new domestic headquarters in Wuhan. In 2020, GMV across all of the company’s platforms exceeded $1 trillion for the first time.

Also in 2020, it was reported that Alibaba software was being used to detect Uyghur faces and those of other ethnic minorities. In further controversy, the Chinese government revealed in 2021 that it would be issuing a $2.8 billion fine on Alibaba for breaking its anti-monopoly regulations.

Alibaba announced a new organizational structure in 2023 designed to support its businesses to become more agile (and to avoid future fines). In doing so, the company established six main business units and various businesses with independent management and operations. The six main units are:

• Cloud intelligence
• Taobao and Tmall
• Local ervices
• Alibaba International Digital Commerce
• Cainiao Smart Logistics Network Limited
• Digital media and entertainment

In 2023, the company’s logistics arm filed for an IPO in Hong Kong, potentially making the first of the company’s new business units to go public

Alibaba Dividend History

Alibaba Group has paid out just two dividends, one in December 2023 at $1 per share, and another in June 2024 at $1.66 per share.

Generally, it has preferred to retain most of its available funds and future earnings to operate and expand the business.

History of Alibaba AI

Alibaba’s AI investment strategy is multifaceted and focuses on supporting innovation across industries. The organization empowers start-ups and entrepreneurs to get the most from AI, driving forward technological advancements and boosting growth.

Following the company’s 2021 anti-monopoly fine and increased regulatory scrutiny, it began to focus heavily on its AI products and it has invested in multiple AI start-ups over recent years.

In 2023, the company unveiled its own AI chat-bot, Qwen (also known as Tongyi Qianwen). Qwen can support both English and Chinese and has been built into many of the company’s operations. The various models of Qwen on offer provide a wide range of capabilities to support businesses in their adoption of generative AI.

Alibaba also has an AI-driven sustainability solution known as Energy Expert which can be used to scientifically calculate and analyze a company or a project’s carbon emissions and provide data-driven insights on materials, resources, and equipment used to support sustainable development.

As of March 2024, the company claims that its open-source AI model community, ModelScope, is the leading source for high-quality models and datasets for developers.

History of the Alibaba Logo

The company’s logo is not all that popular with designers due to its simplicity and perceived lack of sophistication. It simply shows the letter a in lowercase with a relatively abstract smiling face on its interior. Next to the face is the word Alibaba in a basic font.

The only remarkable changes that have taken place since the logo was first introduced has been the removal of the black outline around the face to move to a completely orange color scheme and the moving of the company name to the right of the symbol rather than below it.

The Future of Alibaba

2023 was a year of drastic change for Alibaba, with a complex and substantial restructuring into its six new business units and the appointment of a new CEO, Eddie Wu. But what does the future hold for the new-look business?

Alibaba faces several challenges. For one, it was overtaken by PDD Holdings, which owns Temu, in terms of market capitalization late in 2023. PDD’s market value was almost $185 billion, while Alibaba’s slipped behind at $184 billion. Despite the tenacity of its competitors, Alibaba continues to increase its revenue which stood at $941 billion in the fiscal year ending March 2024.

It also needs to contend with increased regulatory scrutiny both at home and overseas. The global market slowdown remains a threat, as do ongoing USA/China trade tensions.

However, as one of the largest ecommerce companies in the world, Alibaba benefits from economies of scale, a wide-reaching portfolio of businesses, and staunch customer loyalty. According to its 2024 Annual Report, Alibaba intends to focus its investment on accelerating the growth of its core business and maintaining its leadership position in critical technologies and innovation, such as AI. As such, it appears that the next 25 years of Alibaba history could be as fascinating as the first.

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