[ad_1]
[24 de Hong Kong, Reuters BREAKINGVIEWS]- It was the worst Christmas Eve for Alibaba Group, a major e-commerce company in China. On the 24th, the Chinese government officially launched an investigation into the suspicion that the company was involved in the exclusive act. The company’s shares in the Hong Kong stock market fell about 9%, causing it to lose a market value of $ 60 billion.
Financial regulators are also investigating Ant Group, a financial company under the Alibaba umbrella.
Alibaba’s charismatic founder Jack Ma promotes innovation as an ally for small and medium-sized businesses. It is very popular in Japan. Such enthusiastic support may have laid the foundation for political responsibility.
In October this year, Mr. Maun publicly complained about the excessive regulation of fintech companies. Some say this has suspended Ant Group’s re-listing (IPO). Ant was practically controlled by Mr. Maun, and the IPO was expected to be the largest in history.
In fact, the Chinese government seems to have turned to Alibaba and Ant. But perhaps the reason is nothing more than the market power of both companies.
Ant’s mobile payment service “Aripei” dominates the domestic market along with Tencent’s payment service. Ant also manages the Money Market Fund (MMF), which is one of the most popular in the country.
Alibaba’s e-commerce sites “Taobao” and “Tmall” are gradually losing their share to rivals Pinduo Duo and Keito Shojo (JD.com), but transactions through both sites are, It accounts for more than half of domestic e-commerce sales. Not surprisingly, this raises concerns about the abuse of market power.
China’s National Market Supervision and Administration Office has raised concerns about Alibaba’s “two-choice” practice, which urges store owners to enter into exclusive contracts to avoid selling products on competing platforms. Alibaba isn’t the only one using these tactics, but by punishing major companies as a show, it can send a powerful message. In the Hong Kong stock market, the share prices of Alibaba’s rivals also fell.
Under the new penalty guidelines, offending companies will be subject to penalties of up to 10% of their sales. If the Directorate General for Market Supervision applies this guideline to the Alibaba Group’s total sales last year, the penalties could be $ 8 billion, which is not unmanageable.
Alibaba’s stock on the 24th, despite the mid-day trading on Christmas Eve, has a market value that far exceeds this. This highlights the feeling that investors are just beginning to attack Maun’s corporate empire, which extends its turf to artificial intelligence, cloud computing, and digital media.
● Background news
* Chinese regulators begin investigating Alibaba on suspicion of proprietary conduct
* Foreign Stocks: Alibaba Falls, China Starts Monopoly Suspected Investigation
(I am a columnist for “Reuters Breaking views”. This column is based on my personal opinion).
* Reuters columnists provide the content such as news, transaction prices, data and other information in this document for your personal use only and for business purposes only. It is not a thing. The content of this document is not intended to solicit or induce investment activity, and it is not appropriate to use this content for decision-making purposes when trading, buying or selling. This content does not provide any investment, tax, legal or other advice as investment advice, nor does it make any recommendation with respect to specific individual financial stocks, financial investments or financial products. Use of this document is not a substitute for investment advice from qualified investment professionals. Reuters makes reasonable efforts to ensure the reliability of the content, but any views or opinions provided by the columnist are the views or analysis of the columnist, not the views or analysis of Reuters.
