Investments Acquisitions Capital Allocation. Joe Tsai, Executive Vice Chairman

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1 Investments Acquisitions Capital Allocation Joe Tsai, Executive Vice Chairman

2 M&A and Investment Philosophy M&A and Investment Rationale: To Build Long-term Strategic Value to Alibaba The Art of GO: Assets on the Chessboard are Networked

3 What Drives Our M&A and Investments? Our Own Business Strategy M&A AND INVESTMENT AT ALIBABA Future Technology and Trends

4 Integration is Key to Strategic M&A Focus on synergies with Alibaba Outcomes are likely binary Success or failure depends on People + Innovation Business team ownership is a must: innovation and transformation drive value creation

5 Strategic Goals of M&A and Investments STRATEGIC GOALS AutoNavi Sanjiang Improve Customer Experience User Acquisition and New User Profiles Geography Expansion New Retail

6 Minority Investments vs Controlling-Stake Acquisitions We choose to make minority investments in some circumstances instead of full acquisitions for the following reasons: 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

7 How We Think About Valuation PRICE VALUATION VALUE

8 Strategic Uses of Capital COMPANY TYPE OF INVESTMENT TOTAL INVESTMENT YEAR OF LATEST INVESTMENT STRATEGIC AREAS 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 basis 4. 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 completion 7. Includes Alibaba s investment in Weibo in FY14 and FY15 8. 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 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 Logistics Acquisition (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 media Acquisition (54%) and Investments (9% (3), 36% (3) ) $1.5B FY17 Southeast Asia and India $15.5B Strategic investments over the last 2 years totaled $21B (8)

9 Large Minority Investments Have Yielded >4x Return Value Axis notes: 1. The carrying value of Alibaba Pictures includes a non-cash dilution gain of $ billion as a result of deconsolidation of Alibaba Pictures from a financing transaction in FY 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 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 0 investments and as of May 31, 2017 for available-for-sale securities. 5. Using exchange rate $1= RMB6.8 at May 31, 2017 > 4x return $8.6B $4.1B $18.3B Cash Cost Balance Sheet Carrying Value Fair Value Weibo Didi Chuxing Koubei Cainiao Alibaba Pictures Momo Meituan USD in millions (5) Cash Cost Balance Sheet Carrying Value (4) Fair Value (3) Weibo 1, ,995 Didi Chuxing ,181 Koubei ,041 Cainiao 1, ,769 Alibaba Pictures (1) 706 4,413 2,166 Momo (2) 81 1,259 1,259 Meituan (2) Total 4,070 8,555 18,284

10 Share Repurchases $5.1B of Share Repurchases Over the Past 2 Years, $4.1B of Value Creation (3) or 3% of Diluted Share Count (1) (2) $9.2B $2.7B $2.4B $5.1B 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 CY 2015 CY 2016 Repurchase Amount Current Value of Shares

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