Jessie ZhengChief Risk Officer & Alibaba Partner

Platform Risk ManagementPlatform Risk ManagementJessie Zheng, Chief Risk Officer, Alibaba Group

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Platform Risk Management

Diverse Challenges in a Complicated Environment

Solid Progress in IPR Protection

Leveraging Data Technology to Overcome Social Problems

Cybersecurity, Data Protection and Compliance

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Diverse Challenges in a Complicated Environment

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F 1

2489 F 3 5 3 3

Large number of existing and new product listings

Large volume of infringement complaints from different reporting channels

1.5+ billion

Existing listings

48 FNew listings

230+ million per day 10+ million per year 1+ million per year 100K+ per year

Right-holders complaints Customer reports Government requests

Massive Business Scale Creates Unprecedented Challenges3 7 Y0/

Notes�1. Number of product listings as of August 2018.The number of

listings per day is calculated from September 2017 to August 2018

2. Number of complaints received from rights-holders, customer

reports and government agencies in FY2018

+ + F 25 , + + /-. +/ 1 9

Large number of infringement complaints due to large base, but still they account for a fairly small % of the total transactions on our platforms.

(2)

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C U 5 R

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Diversified Challenges, Tough Call to Make

Registration of identical trademark in different countries/regions

Misunderstanding by consumers Infringement complaints filed by unauthorized third parties

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Solid Progress in IPR Protection

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1 115 Years of Accumulated Experience; Breakthroughs in Recent Years

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Launched Alibaba Express IPP

AACA expanded to 105 members

Breakthroughs in recent years

o e

Multilingual support for trademarks

P

Opened morereporting channels

Customer ComplaintsIPP

Online Form SEO

15 years accumulation

l A l T a21Ar c 0 0 t

l ic B i0 0 t c

CB c 0 0 i 0 0 t Ar l

l

5 7 A

2002

IPR protection initiatives on Alibaba.com started

2004

IPR protection initiatives on Taobao Marketplace started

2008

Launched AliProtect

2010

Offline Cooperation Mechanism

2011

Launched TaoProtect

2015

Introduction of Good-faith Mechanism

2016

Integration of AliProtect and TaoProtect Systems

Launched Express IPP Establishment of Alibaba Anti-Counterfeiting Alliance (AACA)

2017

2012

Proactive Monitoring Team Established

2018

100+ AACA Members Establishment of Alibaba IP

Research Institute

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Notes�1. FY2016 and FY2018 (after launch of Express IPP)

rights-holders complaints data

2. FY2016 and 2018 rights-holders complaints data

3. FY2016 and 2018 Platform proactive takedown data and

rights-holders complaints data

24H Complaint-Handling Rate

32%

97%

0%

20%

40%

60%

80%

100%

120%

FY2016 FY2018-after Express IPP launched

87 %

/ 2 87

97% infringement complaints are handled within 24 hours

<24H 97%

3Proactive Takedown/RO Complaints Takedown

10

24

0.00

5.00

10.00

15.00

20.00

25.00

FY2016 FY2018

3 YRight-holders Complaints (million)

21.99

13.48

0.00

5.00

10.00

15.00

20.00

25.00

FY2016 FY2018

38%Registered Complaints Accounts Increase

39%6

Infringement Complaints Decrease

24X

97%/ F1 3 /

/ 04

Proactive takedowns were 24x that of RO-reported takedowns

Of the suspected infringing goods that were proactively deleted, 97% were removed before making a single sale

Unrivaled Progress

FY2016 FY2018-after launch of Express IPP

% -. % % 4 3-. % % 3-. % % 9 3

1Building Trust from Right-holders

0AACA expanded to 105 members

C2 3 A 5

Cooperation with authorities in 23 provinces in the fight against offline

counterfeiting9

More and more brands choose to join Tmall

Note�1. As of 2017

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Leveraging Data Technology to Overcome Social Problems1 0

, 0With Great Influence Comes Great Responsibility

1A 5 35+ ,

500+ million Annual Active Consumers

10+ million enterprises

30+ million Job opportunities created directly and indirectly

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A Series of Firsts in Promoting the Rule of Law

1st lawsuit against counterfeit seller Sued a Taobao store for selling fake Mars pet food

1st criminal case against brushing Sued the organizers of a brushing platform

1st joint litigation with rights holdersAlibaba and rights-holders jointly sued a Taobao seller of fake Bioderma makeup remover

1st case against malicioustrademark squatter

Two cases were selected as top 10 cases promoting the rule of law to guide judicial practiceThe first case of an e-commerce platform suing a counterfeit seller The first criminal sentence for organized brushing

Supported the 1st case against a malicious trademark owner

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2Leveraging AI Technology to Ensure Platform Safety

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Notes�1. Model identification data as of September 2018;

2. Identity verification data as of September 2018.

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Natural Language Processing1 -

OCR

Vision Recognition

Logo Recognition

2 5 -

Biometric Technology

3> 1.5 billion product information

>> 10 million stores

Video Analysis

0Leveraging Advanced Algorithms to Ensure Platform Safety

Account Model

Behavior Model

+

Content Model

+

Credit Model

Over 1,000 models, covering 40+ risk categories

Covering entire life cycle of seller accounts and listings

Over 100,000 features

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4

Entity-Relationship

Model

3Robust Core Computing Capabilities

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Note�Risk control engine data on November 11, 2017.

2 million scans per second at peak times

Up to 30 billion scans per day

Responds in milliseconds

02 /

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Risk control engine

Obscene contentsdetection

Malicious feedback

Transaction fraud

Anti-price gouger

Prohibited & controlled goods

Malicious refund

Voucher abuseSpam registration

Spam message

Account takeover

Image recognition

1Bot detection

5

Real-time, near real-time, offline, three-dimensional prevention system

5Real-time engineMilliseconds

Near real-time engine

MinutesOffline engine

Hours

Cybersecurity, Data Protection and Compliance� ��������

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Cybersecurity

Data Protection

Platform compliance and integrity

D

A 7 1

T

DDoS Attack Defense

Illegal Intrusion Detection

Https Deployed on All Main Business

Vulnerability Detection

Applications Detection

Blue Army Mechanism

……

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Business Qualification

Hazardous Chemicals

S

Obscene Contents

P

Product Qualification

H

Malicious Complaints

……

O C

False Advertising

RT

Data Leakage Prevention Tools

Data Access And Download

Control

C

TransmissionEncryption

High-risk Software

Monitoring

……

GDPR

Digital Watermarking

Techniques