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Alibaba runs the biggest online shopping marketplaces in China and rents out cloud computing power to businesses.
Alibaba is best understood as a collection of marketplaces plus a cloud business. Its main sites, Taobao and Tmall, are where hundreds of millions of Chinese shoppers buy everything from socks to smartphones, and where millions of merchants set up digital storefronts. Alibaba doesn't usually own the goods or hold much inventory itself. It earns money mainly from merchants: they pay for advertising to stand out on the site and for services that help them sell, and its wholesale and grocery arms add more revenue on top. The company's headquarters is in Hangzhou, China.
The original idea is simple. In the late 1990s, founder Jack Ma started with a directory connecting Chinese exporters to overseas buyers. Then came Taobao, which let ordinary people and small shops sell to each other online, and it took off because it was free for sellers when rivals charged fees. That marketplace grew into the everyday shopping habit for much of China, and Alibaba built the payment system Alipay alongside it to grease the transactions, later spun into its own company. The second big engine is Alibaba Cloud, which rents out computing power, storage, and data tools to companies that don't want to build their own. It is China's largest cloud provider, with AI models available as a service. Alibaba also runs a global wholesale business and a logistics network, and it has recently pushed hard into "instant commerce," delivering groceries and daily goods within an hour or so, a costly fight with rivals like Meituan and JD.com.
In 1999, Jack Ma and 17 co-founders set up shop in his Hangzhou apartment with a simple idea: help small businesses find buyers. Their first site, Alibaba.com, was an English-language wholesale marketplace connecting Chinese suppliers with the world, joined the same year by a domestic version. The problem was that small companies had no easy way to reach customers far away; Alibaba gave them a place to meet.
A year later, SoftBank led a $20 million investment in Alibaba. Ma said the deal was struck on a shared vision rather than revenues or a business model — a reminder that investors sometimes buy the dream before the numbers. The money gave Alibaba room to grow.
Alibaba's next big move was Taobao, launched in 2003, where third-party sellers sell goods to ordinary consumers. It became a crucial revenue source for the core commerce business — the engine that would soon power the whole company.
Buying online only works if people trust that their money is safe. Alibaba's answer, launched in 2004, was Alipay, an online payment system. It grew alongside rival WeChat Pay into one of China's two big payments platforms.
In 2005, Yahoo paid $1 billion for a 40% stake in Alibaba, becoming its largest shareholder, and Alibaba took control of Yahoo's China business as part of the deal. It was a huge sign of confidence from a global giant.
In 2008, Alibaba created Taobao Mall, later renamed Tmall, where merchants sell directly to consumers. It became a core part of the commerce business — a cleaner, brand-friendly cousin to Taobao.
In 2014, Alibaba listed on the New York Stock Exchange in the largest IPO ever on the NYSE at the time, raising $25 billion, making it the world's second-largest internet firm after Google. The stock jumped 38% on its first day. The Hangzhou apartment idea had become a public giant.
After Jack Ma gave a controversial speech, regulators abruptly suspended the planned dual IPO of Ant Group in 2020. An antitrust probe into Alibaba followed, and the stock entered a long downturn.
Regulators fined Alibaba a record 18 billion yuan over "choose one of two" monopolistic practices — forcing merchants to pick its platform over rivals. The penalty and regulatory pressure sent the shares into a prolonged slump.
In 2023, Alibaba launched its biggest-ever restructuring, the "1+6+N" split into six business groups with independent boards. Daniel Zhang stepped down as chairman and CEO; Joseph Tsai became chairman and Eddie Wu CEO of the renamed Alibaba Holding Group. The single conglomerate became a holding structure where each unit answers for its own results.
Alibaba's next act is AI. Its AI cloud and compute revenue surged 45% while group revenue grew only 9%, as it built a full stack around its open-source Qwen models, its cloud and in-house T-Head chips, with 380 billion yuan committed to AI and cloud infrastructure. Heavy spending pushed free cash flow negative — the mature e-commerce business now funds the AI bet.
A decade-long antitrust crackdown and a beaten-down share price reshaped the company. After Beijing fined it about $2.8 billion in 2021 over monopoly practices, Alibaba spent heavily buying back its own shares, repurchasing roughly a tenth of its stock in a single recent year. It also split off parts of its empire and sold down stakes. For all its scale, the real risk is that Chinese consumers are cautious and competition is fierce. Alibaba's profits depend less on shipping boxes and more on merchants choosing its site to reach shoppers.
Saved answer · last researched 19 Oct 2026