Trying to determine whether Alibaba Group Holding Limited (BABA) had a successful 2016 campaign depends highly on one's point of view. Despite the fact that BABA shares have risen 7.5% year to date through Wednesday, the Chinese e-commerce giant stands to end the year trailing the returns in the Dow Jones Industrial Average -- up 14% year to date -- by almost 50%.

Alibaba still accomplished quit a bit in 2016, however. Founder and executive chairman Jack Ma entered the year with tons of new goals for the company. And CEO Daniel Zhang, who doesn't get nearly the level of credit he deserves, was successful in executing the company's expansion strategy in areas such as the cloud, expanding the company's Taobao commerce platform and mobile payments. But issues related to counterfeit products also took a hefty toll. What 2017 will bring is unknown. But let's first reflect on an eventful 2016.

Groupon Purchase, Reaches Sales Milestone 

Despite disappointing investors with weak earnings to end 2015, Alibaba entered 2016 with bang. With its ongoing efforts to expand its U.S. footprint, Alibaba disclosed in February it had acquired 33 million shares of Chicago-based Groupon Inc. (GRPN), amounting to a 5.6% stake of the online deals company. The Groupon purchased, which immediately made Alibaba the company's fourth largest shareholder, sent Groupon shares soaring almost 40% on the news.

In March, Alibaba made more headlines, disclosing it had reached a transaction volume milestone of 3 trillion yuan, or $463 billion. Also referred to as gross merchandise volume, transaction volume, tracks the total value of third-party transactions that come through the company's platforms. It's important because it underscores how competitive Alibaba business is.

The milestone translates to a rise of 200% from 1 trillion yuan in 2012, averaging to about 50% growth each year for four years. The company expects to reach transaction volume of 6 trillion yuan by 2020, which would mark a rise of 100% in four years.

World's Largest Retailer, Counterfeit Issues, SEC Investigation

In April, Alibaba -- on 17 years old -- surpassed Wal-Mart Stores Inc. (WMT), becoming the world's largest retailer as measured by gross merchandise volume. In a Form6-K filed with the Securities and Exchange Commission, the company, while citing its gross merchandise volume (GMV) for the period ending March 31, proclaimed "Alibaba Group Has Become the Largest Retail Economy in the World." And the filing further notes that auditor, PricewaterhouseCoopers, "has performed agreed upon procedures on data relevant to Alibaba Group’s GMV."

Analysts, however, questioned the integrity of the claim since Alibaba never really clarified the metrics used to determined how it surpassed Wal-Mart, which posted 2015 revenues of $482.13 billion. In May the International AntiCounterfeiting Coalition (IACC), a nonprofit global organization that help companies fight against the counterfeiting of their goods and piracy, announced it had suspended Alibaba's account, which was active for only one month.

The IACC in April formed a new membership category that made it possible for Alibaba to join. But the dismissal comes amid allegations that Alibaba -- long associated with allegations of cheap brand knockoffs -- didn't do enough to prevent fake products from appearing on its marketplace. Later that month, the Securities and Exchange Commission began looking into Alibaba's business to determine whether its accounting practices violated federal laws.

Alibaba on said it is cooperating with the SEC's probe by providing documents that details its consolidation practices as it relates to party transactions and reported Singles' Day data. According to Bloomberg, Singles' Day, which generates more than 90 billion yuan, or $13.7 billion, is Alibaba's biggest shopping day in terms of revenue on its platform.

SoftBank Unloads BABA Stock, Chanos Declares BABA a Short

In June, Alibaba shares were under heavy selling pressure, declined more 6.6% on June 2, falling to a low of $76.55 after Japan's SoftBank Group, which owns some 32.2% of Alibaba, ranking as its largest shareholder, disclosed plans to sell at least $7.9 billion worth of BABA shares. The transaction marked SoftBank's first sale of Alibaba shares since it began investing in the company in 2000. 

And while SoftBank says the planned sales is in an effort to reduce its debt and affirmed that the two companies plan to maintain a strategic partnerships, it didn't stop Alibaba shares from sinking further. At the same time, news emerged that famed billionaire hedge fund manager Jim Chanos declared that Alibaba was a short. A long-time critic of Alibaba's accounting practices, Chanos cited China's loose accounting standards as reason to be fearful of Alibaba's balance sheet.

Alibaba Enters Driverless Cars, Mars Sells Sweets

In July the race track for driverless cars got a bit more crowded after Alibaba announced its own plans to develop a vehicle. Wang Jian, the company's Chief Technology Officer, told Reuters that Alibaba's internet-connected car technology will set the company apart from competitors looking to dominate the autonomous vehicle market.

Chocolate candy company Mars -- maker of Snickers, M&M's -- partnered with Alibaba to leverage Alibaba’s massive scale and its knowledge on consumers and analytics to grow its position in the country. Mars also hopes to capitalize from Alibaba’s mobile dominance and marketing services. According to the partnership, Alibaba will help Mars expand its brand in China, while facilitating sales expansion, client management and boost product innovation and customization.

Alibaba Tops Q1 Earnings, Jack Ma's Net Worth Now $34B

Alibaba first-quarter revenue rose 59% to $4.84 billion, topping the forecast of $4.54 billion. Second quarter earnings, which excluded non-recurring items, rose 33% year-over-year to 74 cents per share, easily surpassing expectations of 63 cents. “Our results show the scale and leverage of our ecosystem, as we strengthen our competitive positions in core commerce, cloud computing and digital media and entertainment,” CEO Daniel Zhang said in a statement.

In August Jack Ma, already Asia's richest man, just got richer as his net worth rose to $34 billion. His wealth rose, thanks to Alibaba's strong earnings, which sent BABA shares rising as much as 6% to around $95, the highest level since May 2015. In September Alibaba shares soared to new 52-week high, closing at $99.25 - it's highest level since January 2015.

Alipay Takes on US Rivals, Q2 Rev Soars 55%, but Shares Fall

Alibaba's Alipay mobile payment platform want to take on industry players such as Apple Inc.’s (AAPL) Apple Pay, PayPal Inc. (PYPL), and Square Inc. (SQ). Part of its  Ant Financial financial services businesses, Alipay aims to expand operations outside of its main market into the rest of Asia, Europe and the United States. Despite beating consensus estimates on both the top and bottom lines in its second quarter, BABA shares declined almost 4%, falling to a session low of $97.30. Investors were fearful by the potential of slowing growth. 

Though second quarter revenue soared 55% year over year, it marked a slowdown of 20 percentage points from the 76% rise the first quarter. Revenue was driven by solid performances in all four reporting segments, led by a 41% surge in the core e-commerce market business, which rose to $4.27 billion, while the cloud computing unit soared 130% to $224 million. 

Singles Day Sets Record, Alibaba's Cloud Emerge

Alibaba's Single's Day raked in 120.7 billion($17.8 billion) of gross merchandise volume, marking a 32% increase compared to the $14.4 billion GMV in total in 2015. The company has smashed several of its own records this year, bringing in RMB 10 billion ($1.4 billion) in less than seven minutes in the self-invented shopping spree and breaking $5 billion before the first hour was up. The $14.6 billion mobile GMV accounted for 82% of the total GMV, singling out mobile e-commerce as the main driver for China's online retail growth.

Alibaba's cloud emerged a new cloud threat to the likes of Microsoft Corporation (MSFT) and Amazon.com, Inc. (AMZN). The company in November announced plans to expand its data center, taking its cloud position more seriously. The data centers will be located in Dubai, Japan, Germany and Australia. Not only will these new data centers double the number of locations it has outside of China, more importantly, Alibaba cloud reach now exists on nearly every major continent, according to CNBC. "With the addition of those four data centers, it will cover our customers globally," Ethan Yu, general manager of Alibaba Cloud Global, told CNBC.

Bottom Line

Alibaba shares closed Wednesday at $87.37, up 1.36%. The shares have a consensus Buy rating and an average price target of $120, suggesting an almost 40% rise from current levels. With revenue rising in all four reporting segments, led by a 41% surge in the core e-commerce market business, Alibaba has tons of momentum to carry into the new year.

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