Taobao.com Launches B2C Services

With market share of more than 67 percent of China's online shoppers, Taobao.com opens doors to large manufacturers and retailers HANGZHOU, China, 10 May 2006 - Alibaba.com Corporation announced today the launch of business-to-consumer (B2C) services on its Taobao.com online consumer marketplace. Already China's largest online consumer-to-consumer (C2C) marketplace, Taobao.com is expanding its e-commerce model to include products and services provided by major manufacturers and retailers. "While American B2C models have failed to succeed in China, Taobao's model will make B2C a reality in China," said Toto Sun, Taobao.com's General Manager. "Because we are simply connecting large sellers to consumers, rather than taking possession of the goods and serving as a middleman, we are offering a solution that will benefit both manufacturers and consumers in China." Already, Taobao.com has signed up manufacturers and retailers including Motorola, Nokia, Haier, Aigo, Lining, Adidas, Giordano, and UT Starcom. In the coming months, Taobao will aggressively expand its B2C services to include additional leading manufacturers and brands. "Taobao's growth has been based on four pillars - trust and safety, the AliPay payment system, search and an active marketplace," Sun said. "With Taobao's trusted e-commerce community now leading the market, the site is the ideal channel for manufacturers and retailers to reach millions of consumers and to expand as online shopping becomes a part of everyday life in China." More than 10 million small- and medium-sized businesses use other Alibaba.com online marketplaces for B2B marketing and sales, and Taobao.com expects to see a large number of Alibaba.com members joining its new program along with leading international companies. Taobao.com's announcement comes after the China Internet Network Information Center announced this week the results of a new e-commerce study, which found Taobao holding 67.3 percent market share in Beijing, Shanghai and Guangzhou, versus eBay China's 29.1 percent. The recent data indicate significant market share growth from the fourth quarter of 2005, when Taobao.com was found to hold 57.7 percent market share by independent research firm Analysys International. Another recent study, by the Chinese Academy of Social Sciences, found Taobao.com to be the clear market leader in China, with 72.2 percent market share. Taobao.com now has more than 26 million product listings, nearly 20 million registered users, and over 100 million page views per day. In 2005, Taobao's transaction volume, or Gross Merchandise Volume (GMV), reached US$1billion, up 700 percent from 2004. AliPay, China's leading online payment solution, recently reached 150,000 transactions per day. About Alibaba.com Corporation Alibaba.com Corporation is China's leading e-commerce company, operating the world's largest online marketplaces for both international and domestic China trade, as well as China's most popular online payment system, AliPay. Alibaba.com also owns and operates Yahoo! China, which it acquired in October 2005. Alibaba.com's Businesses Alibaba International (www.Alibaba.com) is the world's largest import-export marketplace primarily serving Small and Medium-Sized Enterprises (SME's) in the international trade community. Alibaba China (www.China.Alibaba.com) is China's largest online marketplace for domestic trade among businesspeople. TaoBao (www.Taobao.com) is China's most popular consumer-to-consumer trading site. Yahoo! China (www.yahoo.com.cn), a division of Alibaba.com, is a leading Internet search brand serving China's consumers and businesses. In October 2005, Alibaba.com acquired Yahoo! China and formed a long-term strategic partnership with Yahoo! Inc. AliPay is China's most popular online payment solution and enables individuals and businesses to securely, easily and quickly send and receive payments online. Alibaba.com's Team Alibaba.com was founded in 1999 and is based in Hangzhou, eastern China. It has approximately 3,500 employees, 14 sales offices across China and other offices in Beijing, Hong Kong, Silicon Valley and Europe.

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China Market

China Market Overview China is a rapidly rising global economic power. Overall growth has averaged a robust 7% to 8% for more than a decade, with some markets expanding much more rapidly: 1. China's auto market exploded in 2003, passenger car sales jumping 82% year-over-year. Yet China's auto industry is still in early stages with strong growth projected for years ahead. 2. China is the world's largest telecommunications market with some 280 million mobile subscribers and 270 million wireline subscribers. New wireline subscribers are being connected at close to two million per month while mobile subscribers are growing at four million per month, overall at 14% growth rate. 3. Chinese household appliance manufacturers are experiencing growth in excess of 35% per year. The demand for China's household electric appliances, both domestic and for export, pushed production levels overall for many small and major appliance product categories up 40 to 50 percent or more in 2003. 4. At approximately 1.29 billion people, China is the world's most populous nation, yet Internet penetration and ecommerce are still in the developmental growth stages. According to statistics released by the China Internet Network Information Center, China, with nearly 80 million Internet users, currently trails only the USA and Japan. With the number of Internet users growing at around 5% a month, a household penetration rate of 25% percent is conceivably only three or four years off.

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