Over the past decade, no brand has symbolised the rise of China's tech giants as Alibaba has. The rest of the world began paying attention to Alibaba as the e-commerce titan recorded sales of over $248 billion in 2013, more than eBay and Amazon put together in the same period.
However, the company has seen a rapid succession of bad news since founder Jack Ma was censured by the Chinese government for criticising regulators at a conference in October 2020.
Ant Group, the fintech subsidiary of Alibaba, had been preparing for a record IPO in November 2020. The company eyed a $37 billion dual listing in Hong Kong and Shanghai, which would have made it the biggest IPO ever, globally. The listing would have valued Ant Group at over $300 billion.
However, the Chinese government cancelled the IPO of Ant days before it was to be held. The Chinese government's crackdown against Alibaba signalled the start of a clampdown on 'big tech' by the government. In March, President Xi Jinping declared the government would target companies that were amassing data to create monopolies.
In April, Alibaba was fined a record $2.78 billion for anti-competitive practices.
Last week, Alibaba reported its profits had fallen 81 per cent in the most recent quarter. “Alibaba said profit came in at 5.37 billion yuan ($833 million) for the July-September period, falling from 28.77 billion yuan earned over the same stretch last year,” AFP reported. Alibaba was not the only company to see a dip in growth. Tencent reported its slowest growth since 2004 as the government continued attempts to restrict gaming among minors. Baidu also reported a net loss.
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Last week, Alibaba forecast that its annual revenue would grow at the slowest pace since its stock market debut in 2014. Alibaba chief executive Daniel Zhang told investors growing competition and a dip in consumption in China were the main factors in the slowdown in growth.
On Saturday, Alibaba and Tencent were fined for failing to report corporate acquisitions. “The companies failed to report 43 acquisitions that occurred up to eight years ago under rules on 'operating concentration,' according to the State Administration for Market Regulation. Each violation carried a penalty of 500,000 yuan ($80,000)," AP reported.
