Interview with Mr David Wei

Alibaba.com provides an efficient, trusted platform connecting small and medium buyers and suppliers from around the world. We operate two marketplaces: our international marketplace (www.alibaba.com) focuses on global importers and exporters and our China marketplace (www.alibaba.com.cn) focuses on suppliers and buyers trading domestically in China. Together our marketplaces form a community of more than 24 million members from over 200 countries and regions.

We currently offer two membership packages for suppliers of our international marketplace: Gold Supplier and International TrustPass. The Gold Supplier membership package is for suppliers based in China and Hong Kong, while the International TrustPass membership package is for suppliers based outside of China. We already have hundreds of paying customers in South East Asia, with India being our biggest market in that region.

We had over 10,000 International TrustPass members at the end of June 2007, including a large number from India.

Alibaba.com is focused on B2B e-commerce. Our sister company, Taobao.com, is China’s largest consumer e-commerce website and facilitates both C2C and B2C transactions. The Internet has become a powerful medium for content, communication and commerce in China and globally, and this is driving all forms of e-commerce activities. The number of Internet users in China has grown rapidly in recent years. According to China Internet Network Information Center, or CNNIC, the number of Internet users in China grew from 59.1 million in 2002 to 137.0 million in 2006, with Internet penetration rates increasing from 4.6% to 10.5% over the same period. This trend is expected to be further accelerated in the next few years with the growth of broadband access in China which will benefit both B2B and B2C marketplaces.

Suppliers and buyers come to our marketplaces to establish their presence on the Internet, identify potential trading partners and interact with each other to conduct business online. We offer basic features and services to all users at no charge. We earn our revenue from suppliers who purchase premium services from us, including priority placement in search results, third party authentication & verification, and value-added services.

While we don’t give out our customer renewal rate we can say that a substantial majority of our customers renew their contract with us. Our market leadership position creates a strong network effect that helps grow our community. The more buyers that the website attracts, the more suppliers it will get, and vice versa. This network effect coupled with our extensive sales force and customer service network, means we are able to maintain healthy rates of renewal.