The shares of Alibaba Group Holding Ltd. (NYSE:BABA) rose 38% during the fourth quarter, although they still underperformed in 2015. Alibaba is the largest e-commerce company in China, operating primarily through the country’s two largest online shopping platforms, Taobao and Tmall. We think the stock outperformed during the quarter largely due to improved momentum in monetization of mobile customers, who are increasingly the majority of its overall customer base. We continue to be optimistic about Alibaba’s prospects given its market leading position, positive network effects, high cash generation, and what we believe to be its long runway for continued growth. Over the long term, we see further upside from its cloud computing business, as well as its interest in Alipay, the largest online payments provider in China.
From Baron Funds' Global Advantage Fund letter for the fourth quarter 2015.