A letter from Alibaba CEO Jack Ma to his shareholders

Dear Alibaba Group Shareholders,

亲爱的阿里巴巴股东们：

I would like to take this opportunity, on behalf of everyone at Alibaba Group, to express my deepest appreciation to our customers, employees, investors and partners who have believed in us and supported us over the past year as we embarked on our journey as a public company.

值此佳际，我代表阿里巴巴集团的每一位成员，向我们的客户，员工，投资方以及在过去一年的上市之路上，一直信任和支持我们的合作伙伴致以我最深的感激。

It has been a volatile time for global markets, and we have watched these developments closely. We have a clear vision of where Alibaba is and where it's headed. Over the past year we have become healthier, stronger and more confident and have made great progress in our strategic development.

过去的一年，世界市场瞬息万变，我们密切关注着这一发展。我们的脑海中有一个清晰的蓝图，阿里巴巴身处何方，阿里巴巴将要走向哪里。在过去的一年里，我们变得更加健康，强大，自信并且在战略发展上取得了巨大的进步。

What I said on the occasion of our IPO last year when we raised US$25 billion bears repeating. What we earned was not money, but trust. Maintaining that trust means we must listen carefully to the views of others. It also means we must reflect on the challenges we have when communicating with our shareholders and the public. The majority of our products and services are not accessible outside China, which makes it difficult for our overseas shareholders and stakeholders to fully understand the company and what it is like to be an Alibaba customer. As a result, many are trying to understand us through the lens of an outsider and may not have a full or accurate understanding of who we are and what we do.

去年我们第一次募集到25亿元美金时，我一再重复的话。我们挣到的不是钱，而是信任。我相信，信任意味着必须仔细倾听他人的观点。信任也意味着当我们面对和股东以及公众的交流挑战时，我们必须做出回馈。大部分我们的产品和服务都无法在国外销售，这就使得我们海外的股东和利益相关者很难像阿里巴巴顾客一样完全理解公司。结果就是，很多人通过外部镜头了解我们，很多人可能还没有完全或者准确的理解我们是谁，我们在做什么。

So, I would like to share some of our thoughts about Alibaba Group here with you:

所以，我想在这里和你分享一些关于阿里巴巴的想法。

ALIBABA GROUP'S STRATEGY IS TO BUILD THE INFRASTRUCTURE OF COMMERCE FOR THE FUTURE. E-COMMERCE IS ONLY THE FIRST STEP.

阿里巴巴集团的策略是建立未来商业基础设施。电子商务只是第一步。

Many people confuse us with other e-commerce retailers and therefore assess our business model solely on the basis of the growth rate of our gross merchandise volume (GMV). In fact, this narrow definition of e?commerce is only a fraction of the Alibaba Group strategy. What we are building is an open, transparent and collaborative infrastructure for commerce.

许多人把我们和电子零售商混淆，因此，只通过我们的商品交易总量来评估我们的商业模式。事实上，这一对于电子商务狭隘的定义仅仅是阿里巴巴集团战略的一部分。我们正在建立的，是一个开放、透明和合作的商业基础设施环境。

At the end of June 2015, Alibaba Group has 34,000 employees, and fewer than 10,000 of those employees are directly involved in our China retail marketplaces and related GMV. Our platform model is highly efficient as we generate close to RMB3 trillion GMV at an average of nearly RMB300 million per person. We continue to improve our technology and products in order to win market share through innovation and technology — we never rely on the strategy of simply increasing headcount. In the coming years, we will have the opportunity and capability to build the most efficient business organization among the large global companies while creating the most job opportunities through our ecosystem.

截止2015年7月，阿里巴巴集团已经有34000名雇员，只有不足10000名员工直接参与中国零售市场和相关的商品交易量业务。我们的平台模式非常奏效，因为我们产生了接近3万亿的商品交易量，平均每人大约3亿交易量。为了通过创新和科技来赢取市场份额，我们一直在提升我们的科技和产品，我们从不仅仅依靠裁员战略。在未来的日子里，我们有机会和能力在大型全球公司间建立有效的商业组织，同时通过我们的商业系统创造最多的就业机会。

Setting aside the employees working on our China retail marketplaces, our B2B business and backroom operations teams, close to half of Alibaba's workforce is focused on building businesses that have long-term strategic importance. We firmly believe that only by investing in the future and adhering firmly to our long-term strategy will Alibaba have a true future.

除了供职于中国零售市场的员工以外，我们的B2B商业和接近阿里巴巴一半人数的幕后操作团队致力于建立具有长远战略意义的商业。我们坚定地相信，只有通过对未来的投资，并且贯彻长期策略才能使阿里巴巴拥有真正的未来。

It is only through Internet technology and big data that we can establish a truly meaningful innovative infrastructure for commerce that will provide comprehensive support to small and medium-sized enterprises. The less developed business infrastructure in China provides Alibaba a unique opportunity to create the infrastructure of China's future commerce, not just the infrastructure of e-commerce. Around half of Alibaba Group's workforce and our affiliated companies, including Ant Financial and Cainiao, are working on important areas of our ecosystem, including logistics, Internet finance, big data, cloud computing, mobile Internet, advertising and the so-called double H industries — Health and Happiness (the big data-based healthcare and digital entertainment businesses which will take 10 years to become data-driven).

只有通过互联网技术和大数据，我们才能建立一个真正具有意义的创新商业基础设施，这一基础设施回味中小型企业提供综合保障。中国商业基础设施欠发达这一契机，使得阿里巴巴拥有一个独特的机遇—为中国未来的商业贸易建立基础设施，而不仅仅使电子商业基础设施。包括蚂蚁金服和菜鸟在内，大约一半的阿里巴巴员工和相关公司在我们生态链的重要领域工作，这包括手机互联网，广告和被称为2H的工业-健康和幸福。

Today, Cainiao, our logistics affiliate, helps handle around 10 billion packages every year; our affiliated Internet financial arm serves more than 400 million active users; our cloud computing business, which is maintaining an annual growth rate of over 100%, is taking a leading role in the world; and our mobile-based products, including search, map and browsers, are providing vital infrastructure services to Chinese users. In the future, we will continue to provide a broad spectrum of services to tens of millions of Chinese companies, spanning e-commerce, financial services, logistics, cloud computing and big data, marketing, and cross-border trading services.

如今，我们的物流联盟-菜鸟，每年协助我们处理大约一百亿的包装，超过4亿的附属网络金融服务分支：我们的云计算业务每年以超过100%的速度成长，世界领先。还有我们的手机产品，包括搜索、地图和浏览器在内，都在向中国用户提供重要的基础设施服务。未来，我们将继续为成百上千万的中国公司提供范围宽泛的服务，这横跨电子商务，金融服务，物流，云计算，大数据，市场和跨界交易服务。

Today, some of our strategic businesses are yielding initial results. Take logistics as an example. In fiscal year 2015, Alibaba generated more than 24 million packages on a daily basis handled by the more than one million delivery personnel employed by our logistics partners. We expect that in 10 years, the number of delivery personnel in China will exceed 10 million. This growth will be driven by social forces rather than by any single company. We also believe that over the next three years, Cainiao's unique services will bring significant changes to the logistics sector and users will be able to enjoy enhanced and standardized services. Logistics will become a standard offering of e-commerce companies rather than a core competence. Therefore, Cainiao's mission is to enable delivery firms to provide standardized and formalized services.

如今，我们的部分战略性业务已经产生了预期的结果。以物流为例，2015年，阿里巴巴每个交易日产生2400万的交易，这些交易由我们物流伙伴超过100万的邮递员操作。我们希望未来的十年里，中国的邮递员数量可以超过1000万。这一增长将会由社会力量驱动，而不是通过任何公司。我们也相信，在未来的三年时间里，菜鸟独特的服务将会为物流也带来具有划时代意义的转变，用户将会享受这一被提升和标准化的服务。物流将会成为电子商务公司的标准化提供而不是核心能力。因此，菜鸟的认为就是使快递公司可以提供标准化，正式化的服务。

CHINA'S ECONOMIC DEVELOPMENT AND ITS RELATIONSHIP WITH ALIBABA GROUP

中国经济的发展以及它和阿里巴巴集团的关系

Recently, signals of China's economic slowdown have triggered widespread concern and, I believe, overreaction around the world. This reaction illustrates how China's economy has been fully integrated into the world economy with a considerable degree of influence. However, we believe an economy that continues to experience such rapid growth is neither realistic nor sustainable and China shouldn't aim for such growth.

近日，中国经济下滑的信号引发了全球的关注，我相信，大家对此过度担忧了。这一反应说明，中国已经完全融入了世界经济，并且拥有相当大的影响力。然而，一个继续经历如此之快速增长的经济体既不现实也不持续，中国并不应该瞄准此类增长。

For example, the cost of high-speed economic growth has been the destruction of ecological resources. After many government vows to upgrade the economy, the financial crisis in 2008, fatigue in investment and exports and unrealistic expectations of ever-faster growth, China's economy has reached a point where it must upgrade and update. The current GDP growth pattern is not sustainable. In fact, if China continues to pursue the high growth rates of the past, then China will pay a high price.

比如，生态资源的毁坏就是经济过快增长的代价。2008年经济危机后，很多国家立誓言要提振经济，伴随着投资、出口的疲软以及对于经济增长过快的不切实际的预期，中国经济正面临着必须升级换代的局面。目前的GDP增长模式并不能持续，事实上，如果中国继续追求和以往一样的高增长率，中国将会为此付出高额代价。

I firmly believe that for the future, the advantages of a slowdown in China's economic prospects far outweigh the disadvantages. China's economic development is no longer in need of increasing its numbers, but of increasing its quality. China is the world's second-largest economy, and even with a GDP growth rate of 5%, the growth rate is more than double that of developed economies.

我坚信，中国经济前景放缓的优势要大于劣势。中国经济增长已经不再需要增加它的数量，而是增加质量。中国是世界第二大经济体，即使GDP增速为5%，它的增长率也是发达经济体的两倍。

In the past 30 years, the Chinese economy has benefited from the liberalization of thinking and a more open economic policy. However, we have not focused on fostering the creativity and innovation of people, which is the most important factor in stimulating productivity. High GDP growth relies on the capacity of manufacturing, while the improvement in quality of life relies on innovation. I believe there is much more we can do in this regard.

在过去的30年里，中国经济因为思想的自由和更加开放的经济政策受益。然而，我们并不关注培养人的创造力和创新能力，这是促进生产力最重要的因素。高GDP增长率有赖于生产制造能力，然而生活质量的提高有赖于科技创新。我相信，在这一方面我们有很多可以做。

China's economy is transitioning from an export sales-driven economy to a domestic-consumption economy, and from investing in infrastructure to operating infrastructure. China will use advanced technology and a new market-driven approach to solve the issue of sustainable development. All in all, China's economy has immense potential. It will not be easy, but China's future "economic miracle" will lie in its ability to boost productivity and its use of big data and Internet technology to stimulate domestic consumption and generate exponential development opportunities.

中国经济正由出口带动向国内消费经济转变，由投资基础设施向运作基础设施转变。中国将运用先进的科技和新的市场驱动方法来解决持续发展问题。总而言之，中国经济潜力巨大。虽然不易，但是中国未来的"经济奇迹"取决于它提高生产率的能力和对于大数据以及互联网技术的应用，这都可以促进国内消费并且产生陈蓓的发展机遇。

Will the economic slowdown have any impact on Alibaba?

经济下滑对阿里巴巴有影响吗？

At the end of March 2015, the GMV of Alibaba's China retail marketplaces had already reached RMB2.44 trillion, accounting for 9% of China's retail consumption. We predict that over 50% of China's consumption will be conducted online within 10 years, and that means massive potential for the e-commerce market. On this basis, more than 80% of China's enterprises will need to use an Internet-based e-commerce platform, logistics network, financial services, cloud computing and cross-border services. Alibaba's investments today will make this possible. Our business is no doubt closely related to the Chinese economy, and we believe the services Alibaba Group will provide in the future will be the fourth indispensable resource for enterprises, after water, electricity and land.

截止2015年3月，阿里巴巴中国零售市场的商品交易总额已经达到2.44万亿人民币，占据中国零售市场的9%。我们预测，未来十年，超过50%的中国消费将在网上进行，这就意味着电子市场巨大的发展潜力。基于此，超过80%的中国企业将需要运用互联网电子商务平台，物流互联网，金融服务，云计算和跨界服务。阿里巴巴如今的投资将使这一切变得可行。我们的商业无疑与中国经济息息相关，我们相信阿里巴巴在未来提供的服务将会成为企业仅次于水、电和土地之后第四大不可获取的资源。

I do not agree with the notion that consumption will decline as economic growth slows. It is inaccurate to think that the slowdown of the Chinese economy means that Chinese people are unwilling to spend. The Chinese lifestyle philosophy is different from that of the West. Consumers in developed Western economies are good at spending the money they believe they will earn in the future. To the contrary, Chinese people are constantly saving for the future. The saving rates in China are some of the highest in the world. During economic downturns, Western consumers may have trouble borrowing to maintain their lifestyles, but their Chinese counterparts have savings for retirement or for times of crisis. Therefore, slower economic growth does not mean declining purchasing power. With the convenience and value-for-money merchandise offered by e?commerce, consumers are becoming more and more willing to shop online.

我并不同意消费将会随着经济增长变缓而减少的观点。认为中国经济下滑意味着中国人不愿意花钱的想法是不准确的。中国人生活方式的哲学和西方不同。发达经济体中的消费者善于消费，因为他们相信他们可以在未来赚回来。与此相反，中国人不断地为未来积蓄。中国的储蓄率在世界排名靠前。在经济低迷时期，西方消费者借款以维持自己的生活方式，但是中国消费者有退休金和应对危机时期的储蓄。因此，低经济增长并不意味着消费力的下降。伴随着电子商务所提供的便捷性和虚拟主体消费，消费者越来越愿意在网上购物。

China's middle-class population is close to 300 million and in 10 years, that number is going to reach 500 million. Yet the level of consumption among the middle class is still well below their income level. Bearing in mind that consumption is triggered by innovation, it follows that Alibaba's business model will be a strong driver of domestic consumption in China going forward. This is clearly illustrated by the consumption volume of Alibaba's 11.11 Global Shopping Festival. China does not lack domestic consumption power. Being thoughtful about how to ignite that power is the key. Whether it is about facilitating imports, driving domestic demand in tier 3 and 4 cities or unleashing the purchasing power of a rural population more than 600 million strong, Alibaba has a great deal to offer.

中国大约有3亿的中产阶级，未来十年，这一数据将会达到5亿。然而中产阶级的消费水平仍然大大低于他们的收入水平。我们应该铭记，创新推动消费，阿里巴巴的商业模式将是中国未来国内消费的强大推动力。这已经被阿里巴巴双十一全球购物节的消费量充分证明了。中国并不缺乏内需，如何刺激内需才是关键。无论是带动进口，促进国内三四线城市的内需，还是释放超过6亿农村人口的消费力，阿里巴巴都有很多可以供应。

Great companies are born in challenging times. We believe the transformation of the Chinese economy from a focus on quantity to quality will lead to the formation of some of the world's most remarkable enterprises. Alibaba hopes it will become one of them.

大公司产生于充满挑战的时代。我们相信中国经济从关注数量到质量的转变将会使得一些世界最伟大公司产生。阿里巴巴希望成为其中之一。

FUTURE DEVELOPMENTS: GLOBALIZATION, RURAL DEVELOPMENT AND BIG DATA CLOUD COMPUTING

未来发展：全球化，乡村发展和大数据云计算

Our key priorities for the next decade will be globalization, development of the rural economy and big data.

未来十年我们的主要优先发展领域是全球化，乡村经济发展和大数据。

In terms of globalization, we aim to help small- to medium-sized businesses around the world expand beyond their borders by leveraging the power of e-commerce, Internet financing, big data, and marketing and logistics platforms. We believe the experience of Alibaba Group in China can be applied globally, giving all SMEs the opportunity to participate and compete in a transparent and fair marketplace. We further believe that future economic globalization will allow consumers everywhere to access a truly global purchasing experience. We have been preparing for a considerable amount of time to make this vision a reality. It may take another one or two decades to complete the mission, but we won't quit until we live up to our true mission "to make it easy to do business anywhere."

就全球化而言，我们目标利用电子商务，互联网金融，大数据，市场和物流平台帮助全球的中小型企业扩展他们的边界。我们相信，阿里巴巴在中国的经验可以全球推广，给所有中小型企业一个在透明和公平市场环境中参与和竞争的机会。我们相信，未来经济全球化能使世界各地的消费者真正享受到全球购物体验。我们正在准备用大量的时间使得这一愿景成为现实。我们也许还要花十年或者二十年的时间来完成这一目标，但是我们不会服输，知道我们达到自己真正的使命"让商业处处可行"。

China has a rural population of more than 600 million, and the business infrastructure in China's rural areas is poor. However, with the growing popularity of mobile phones, tremendous changes have taken place in these areas. Taobao Marketplace and Tmall, in particular, link farmers directly with urban life. We are now renovating rural infrastructure by leveraging mobile Internet technology, big data, logistics and Internet financing. We do this not only because of the tremendous market potential, but also to close the digital divide, promote information equity and help alleviate poverty through economic opportunity. We are witnessing great changes in China's countryside, and we encourage our shareholders to visit China's rural areas to see these changes for themselves. What we are doing today may become a development model for many developing countries in the future. At this historic time, Alibaba Group must embrace change, invest in change and drive change.

中国有超过6亿的农村人口，中国农村地区的商业基础设施很差。然而，伴随着电话的普及，这些地区已经发生了巨大的变化。尤其是淘宝和天猫，使农民直接和城市生活相连。我们现在正在利用手机互联网科技，大数据，物流和互联网金融革新农村商业基础设施。我们并不是基于巨大的市场潜力做这些，也是为了打破电子隔离，促进信息平等，并且通过经济机遇来减缓贫困。我们目睹了中国乡村的巨大变化，我们鼓励我们的股东来参观中国农村，亲眼目睹这些变化。我们今天所做的一切可能会成为很多发展中国家未来的发展模式。在这一历史时期，阿里巴巴集团必须拥抱转变，投资转变，促进转变。

Over the past six years, Alibaba Group has made a significant strategic investment in cloud computing and big data services. We believe that mankind is departing the IT era and entering a new era of DT (data technology). In the society of tomorrow, data will be the most important means of production, innovation and social development. People and data will be interwoven. We must continue to invest in the development of data technology. Alibaba is fundamentally a data-driven company. We firmly believe that we will see substantial returns from the investments we have made in data and related technologies over the past six years and will continue to make in years to come. Still in its infancy, we are working to make data and cloud computing the foundation for an inclusive economy. The future potential is massive.

在过去的六年时间里，阿里巴巴集团已经在云计算和大数据服务上做了很多意义深远的战略性投资。我们相信，人类已经要离开IT时代，进入大数据时代。未来社会，数据将会成为生产，创新和社会发展最重要的手段。人和数据将会交织。我们必须继续投资数据科技的发展。阿里巴巴从根上来说是一个数据驱动的公司。我们坚信，我们将会从过去六年我们对数据和相关科技的投资中获得可观回报，我们会继续在未来的日子进行投资。在出生阶段，我们已经在努力使得数据和云计算成为经济的基础。它未来的潜力是巨大的。

ALIBABA'S CHALLENGE

阿里巴巴的挑战

Alibaba has challenges, but what concerns us may be different from what some may think, and we never shy away from talking about competition or our competitors. Over the past 16 years, we've never been short of competitors, nor have we benefited from any form of protection. We've blazed our own trail through fierce market competition. We have learned to survive while maintaining our ideals and values. It hasn't been easy.

阿里巴巴也面临着挑战，但是我们关心的也许和有些人关心的不一样，我们从不避讳谈论竞争和我们的竞争者。在过去的16年里，我们从不缺少对手，我们没有从任何形式的保护中获益。我们再激烈的市场竞争中开拓自己的道路。我们学会了在保持自己的理想和价值观的同时存货。这并不容易。

We have never been afraid of confronting new challenges. We excel over our competition by engaging in effective strategic planning and flawless execution.

我们从不害怕面临新挑战。我们通过有效的战略部署和完美地执行在战争中取胜。

Alibaba seeks to initiate a business revolution. Our future is the infrastructure of commerce. We are in the business of enabling sales transactions — this means we never compete with the businesses on our platforms. Our so-called competitors are also businesses that we want to support and help scale. In other words, it is not appropriate and an oversimplification to view companies that are engaged in e-commerce as competitors to the Alibaba Group. Comparing us to other e-commerce companies is not an apples-to-apples comparison. In our case, our relationship with merchants on our platform is more like apples and the apple tree.

阿里巴巴想要开创一场商业革命，我们的未来是商业基础设施。我们在做的买卖是使得买卖交易可行，这意味着我们从不在我们的平台上竞争。我们的竞争者也是我们想要支持和帮助扩张的商业体。换句话说，把参与电子商业的公司说成阿里巴巴的竞争者并不恰当也太过草率。把我们和其他电子商业公司作比较和苹果比苹果是不一样的。对我们而言，我们和平台商人的关系更像是苹果和苹果树的关系。

Our biggest challenge is not our competition, but our ability to grasp the future and manage ourselves. With our ambitious vision and unique ecosystem, we need professional talents from different fields, a unique culture and an organization that can adapt to future developments. Our colossal business ecosystem and intertwined structure will require not just more corporate managers, but leaders, innovators and trailblazers. This is a tremendous challenge for a 16-year-old company with a workforce with an average age of only 29. There is almost no reference for us when we develop our talents, corporate culture, management model, and the relationship between our business units and government departments. As a young company, we are committed to a mighty challenge, one that's unprecedented and beyond the imagination. But this is a golden opportunity. We have told ourselves over the past 16 years: If not now, when? If not us, who?

我们最大的挑战不是竞争，而是我们抓住未来和管理自我的能力。凭借我们充满远见的愿景和唯一的生态系统，我们需要不同领域的专业人才，一种独特的文化和一个可以适应未来发展的组织。我们庞大的商业经济系统和交织的结构不仅仅需要合伙人，也需要领导者，创新者和开拓者。这对于一个平均年龄29对的公司来说是一个巨大的挑战。当我们培育我们的人才，企业文化，管理模式和商业以及政府之间的关系时，几乎没有参考。作为一家年轻的公司，我们面临着巨大的挑战，一个前所未有，超过想象的挑战。但但是这不是黄金鲫鱼。在过去十六年，我们一直告诉自己：如果不是现在，那是合适？如果不是我们，那是谁？

This is the first letter I have published since the IPO on my thoughts about Alibaba's development strategy to our investors. Thank you again for investing in us and being part of the development of a future business ecosystem. We are grateful for the trust you have placed in us and what we will accomplish in the future.

自从第一次公开募股以后，这是我关于阿里巴巴发展战略给股东的第一封信。再次谢谢你们的投资，并且成为未来商业经济链发展的一部分。我们感谢你们给予的信任，我们会在未来完成这一使命。