SecProbe.io

CORRESP
1
filename1.htm

    Simpson Thacher &
                    Bartlett

    icbc
                    tower, 35th floor

    3 garden
    road, central

    hong
    kong

    telephone:
                    +852-2514-7600

    facsimile:
    +852-2869-7694

    Direct Dial Number

    +852-2514-7660

    E-mail Address

    dfertig@stblaw.com

    January 17, 2024

Confidential and via
edgar

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

    Attention:

    Ms. Jennifer
                           Thompson

                           Mr. Austin Pattan

                           Ms. Lyn Shenk

                           Mr. Abe Friedman

 Re: Alibaba Group Holding Limited

                                            Form 20-F for Fiscal Year Ended March 31, 2023

                                            Filed July 21, 2023

                                            File No. 001-36614

Ladies and Gentlemen:

On behalf of our client,
Alibaba Group Holding Limited, a company organized under the laws of the Cayman Islands (together with its subsidiaries, the “Company”
or “Alibaba”), we respond to the comments contained in the letter from the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”), dated December 18, 2023 (the “December 18
Comment Letter”), relating to the Company’s annual report on Form 20-F for the fiscal year ended March 31,
2023 filed with the Commission on July 21, 2023 (the “2023 20-F”).

Set forth below are the Company’s
responses to the Staff’s comments in the December 18 Comment Letter. The Staff’s comments are retyped below for ease
of reference. The Company respectfully advises the Staff that where the Company proposes to add or revise disclosure in its future filings
on Form 20-F in response to the Staff’s comments, the changes to be made will be subject to relevant factual updates and changes
in relevant laws or regulations, or in interpretations thereof. In particular, the Company respectfully advises the Staff that, since
the beginning of the current fiscal year ending March 31, 2024, the Company has implemented a new organizational and governance
structure that includes six major business groups and various other businesses (the “Reorganization”). The Company’s
six major business groups following the Reorganization are:

Simpson Thacher & Bartlett

Division of Corporation Finance

U.S. Securities and Exchange Commission

 -2- January 17, 2024

· Taobao
and Tmall Group;

· Alibaba
International Digital Commerce Group;

· Local
Services Group;

· Cainiao
Smart Logistics Network Limited;

· Cloud
Intelligence Group; and

· Digital
Media and Entertainment Group.

Accordingly, the Company’s segment reporting
has been updated to reflect how the Company’s chief operating decision maker reviews information under this new structure.

Form 20-F for Fiscal Year Ended March 31,
2023

Item 5. Operating and Financial Review
and Prospects

Non-GAAP Measures, page 131

 1. We
                                            have reviewed your response to prior comment 1. In your response you discuss how merchants
                                            view the various fees as a holistic package of services. While your customers may allocate
                                            their funds based on a holistic premise, it appears from your quarterly results that the
                                            Company's results may be materially impacted by the differing components of your customer
                                            management revenue. In particular, we noted from your Q3 2023 earnings release filed together
                                            with your Form 6-K on November 16, 2023 "Customer management revenue increased
                                            by 3% year-over-year, primarily due to the increase in merchant’s willingness to invest
                                            in advertising, partly offset by the modest decline in online GMV." We also noted from
                                            your Q3 2023 earnings release, the Company upgraded one of its key advertising platforms
                                            "with the aim of growing the number of merchants who advertise." It seems the sources
                                            of customer management revenues are impacted by differing factors, and can have differing
                                            impacts on your business. As such, it appears the sources of your customer management revenues
                                            may materially impact your china commerce segment. Please revise to separately quantify advertising
                                            and third-party commissions, or advise accordingly.

The Company respectfully advises the
Staff that the Company continues to hold that separately presenting marketing services revenue and commission revenue will not provide
investors with insights into the Company’s business trends, and is also not consistent with how the Company’s management
views and manages the business.

Taobao and Tmall Group offers merchants
a comprehensive solution comprised of a diverse array of products and services to enable them to attract, engage and retain consumers,
complete transactions, improve their branding and enhance operating efficiency. These products and services have differing fee structures,
including cost-per-click (CPC), cost-per-thousand impressions (CPM) and cost-per-sale (CPS) (i.e. fees charged based on the GMV transacted,
including commission on transactions), among others. The Company believes that merchants allocate their spending on the Company’s
marketplaces to maximize their return on investment, and the optimal mix of products and services differs from merchant to merchant,
and also changes from time to time depending on each merchant’s own strategy, marketing and operational needs. Accordingly, Taobao
and Tmall Group aims to offer merchants an integrated package that helps them optimize return on investment, rather than separately operating
different products and services or revenue streams. For instance, Taobao and Tmall Group’s Wanxiangtai is a comprehensive one-stop
marketing solution that integrates multiple tools and resources, such as P4P, search, recommendation feeds and live-streaming, and leverages
data and AI technologies to provide merchants with insight and help them optimize their return on investment.

Simpson Thacher & Bartlett

Division of Corporation Finance

U.S. Securities and Exchange Commission

 -3- January 17, 2024

As such, the Company believes that
the makeup of Taobao and Tmall Group’s customer management revenue within a period will not provide any meaningful information
to investors, because the revenue mix is merely the result of the aggregate mix of products and services purchased by merchants during
that period, which in turn reflects merchants’ views as to how to optimize their overall return on investment and can vary and
fluctuate from period to period. For example, merchants’ increased willingness to invest in advertising could drive growth in either
CPC revenue or CPS revenue, or both, depending on the types of products and services purchased by merchants. In other words, merchants’
willingness to invest in advertising affects the Company’s overall take rate, and is not specifically related to a particular type
of revenue.

Comparison of Fiscal Years 2022
and 2023, page 134

 2. We
                                            note your response to prior comment 3 and your proposed revised disclosure in Annex B of
                                            your response. You have added language that further describes the reasons for changes and
                                            have, in some instances, quantified percentage changes in certain factors. However, your
                                            revised disclosure does not provide sufficient information to determine the absolute impact
                                            of factors cited. For example, you state customer management revenue decreased 8% primarily
                                            due to a 5% decline in the volume of online physical goods GMV. It is not clear the extent
                                            to which the 5% decline in volume impacted customer management revenue because you provided
                                            a percentage of an amount that is not quantified. In addition, it does not appear you have
                                            quantified the extent to which changes are attributable to changes in prices or to changes
                                            in volumes or amount of products or services being sold. For example, you state direct sales
                                            increased 6% due to growth of Freshippo and Alibaba Health of 2.8% and 2.5%, but it is not
                                            clear how a financial statement user would determine the impact of each factor cited.

Therefore, we reissue our prior
comment. We believe your disclosure could be improved by:

 · relying
                                            on tables to present dollar and percentage changes in accounts, rather than including and
                                            repeating such information in narrative text form;

Simpson Thacher & Bartlett

Division of Corporation Finance

U.S. Securities and Exchange Commission

 -4- January 17, 2024

 · using
                                            tables to list, quantify, and sum all of the material individual factors to which changes
                                            in accounts are attributable;

 · refocusing
                                            the narrative text portion of the disclosure on analysis of the underlying business reasons
                                            for the individual factors in the tables above;

 · ensuring
                                            that all material factors are quantified and analyzed; and

 · quantifying
                                            the effects of changes in price, volume, and acquisitions on revenues and expense categories,
                                            where appropriate.

In response to the Staff’s comment,
in its future annual reports on Form 20-F, the Company will supplement its disclosure on Taobao and Tmall Group’s customer
management revenue to quantify the changes in GMV and take rate. The Company will also supplement its disclosure on direct sales revenue
if the effects of changes in prices or volumes of products or services being sold are material. The Company has further clarified the
way in which the percentages cited relate to and can be linked to quantified and disclosed financial numbers.  While not doing this
in the form of a table, the Company has enhanced the disclosure to enable investors to better understand the specific quantified amounts
of various changes cited. The Company believes that the material factors pertinent to the Company’s financial results and operating
performance have been disclosed and discussed.

For illustrative purpose, a copy of
the Company’s intended revised disclosure is set forth with revisions in Annex A. The Company will provide disclosure similar to
the revisions in Annex A in its future annual reports on Form 20-F.

Sales and Marketing Expenses, page 138

 3. We
                                            have reviewed your response to prior comment 4. To the extent known, please further revise
                                            to provide quantification of your decrease in sales and marketing expenses from specific
                                            segments or individual businesses which had material impacts on your consolidated sales and
                                            marketing expenses.

The Company respectfully advises the
Staff that the 15% decrease in sales and marketing expenses excluding share-based compensation was primarily the result of improved operating
efficiency and cost optimization from its China Commerce segment (before the Reorganization), which led to a significant decline in marketing
and promotional expenses.

Simpson Thacher & Bartlett

Division of Corporation Finance

U.S. Securities and Exchange Commission

 -5- January 17, 2024

A copy of the Company’s intended revised disclosure
is set forth with revisions in Annex B.

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections, page 202

 4. We note your response to prior comment 8, including Annex
                                            D, and have the following comments:

 · With
                                            respect to your disclosures under Item 16I(b)(2), please amend your Form 20-F to disclose
                                            and quantify any ownership interests held by governmental entities, including any ownership
                                            interests held by state-owned enterprises, in you and your consolidated operating entities.
                                            In particular, we note your statement that “less than 20 other consolidated entities
                                            in [y]our direct sales, sports-related, logistics and other businesses have governmental
                                            ownership” and that these entities, in the aggregate, would not be a significant subsidiary
                                            as defined in rule 1-02(w) of Regulation S-X. When you amend your filing, please
                                            provide additional detail beyond what was contained in your response about the governmental
                                            ownership interests in these entities that do not constitute significant subsidiaries in
                                            each relevant jurisdiction, along with information about the relative impact of these entities
                                            on your financial statements.

 · With
                                            respect to your disclosures under Item 16I(b)(5), please confirm in your supplemental response,
                                            if true and without qualification, that your articles of incorporation and the articles of
                                            your consolidated foreign operating entities do not contain wording from any charter of the
                                            Chinese Communist Party. Please note that neither Form 20-F nor our Release No. 34-93701
                                            limit the required disclosure to significant subsidiaries as defined in rule 1-02(w) of
                                            Regulation S-X.

In response to the Staff’s
comment with respect to the disclosures required under Item 16I(b)(2), the Company provided further details of its subsidiaries and
consolidated entities with governmental ownership, including the jurisdiction of these subsidiaries and entities and of the relevant
governmental entities, percentage of governmental ownership in these subsidiaries and entities, and the revenue contributions of
these subsidiaries and entities on a standalone basis (aggregated by business lines) in Fiscal Year 2023. A copy of the
Company’s intended revised disclosure is set forth with revisions in Annex C. The Company respectfully advises the Staff that
the Company relied on public databases to determine governmental ownership in its PRC subsidiaries and consolidated entities, but
such databases are not available for the Company’s overseas subsidiaries and consolidated entities. The Company leveraged
other publicly ava