May 8, 2021

The World Live Breaking News Coverage & Updates IN ENGLISH

The World Live Breaking News Coverage & Updates IN ENGLISH

, Fines Aren’t Alibaba’s Problem — Competition Is, The World Live Breaking News Coverage & Updates IN ENGLISH

Fines Aren’t Alibaba’s Problem — Competition Is

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Alibaba has become the standard for Chinese e-commerce, but the market is nearing saturation.

, Fines Aren’t Alibaba’s Problem — Competition Is, The World Live Breaking News Coverage & Updates IN ENGLISH

Earlier this month, Alibaba was fined a jaw-dropping $2.8 billion for anti-competitive business practices following an investigation launched by China’s market regulator in December. The fine, a record for global antitrust, mainly indicates two things:

  1. Authorities are stepping up in terms of tech oversight — China’s walled gardens aren’t quite crumbling, but they’re showing plenty of wear and tear; and
  2. Beijing isn’t too happy with Jack Ma.

Ultimately, it’s a lot of money, yes. But that’s not the point. The fine has spurred a broader discourse of the state of Alibaba and where it will (or can) go moving forward: the terrain it has conquered, the terrain it hasn’t, and what that means for the giant.

Alibaba Faces Increased Competition on All Fronts, and It’s Not Winning

Anti-monopoly does what anti-monopoly does. China’s tech landscape certainly hasn’t lacked competition in itself, but it was missing fair competition. For the benefit of consumers, the ultimate objective of the big Alibaba fine was to compel it to give up on its longstanding “forced exclusivity” policies.

Alibaba required merchants who wanted to sell on its e-commerce platforms to refrain from working with rivals such as JD.com or Pinduoduo and commit exclusively to Taobao or Tmall. Half a decade ago, Alibaba leveraged a similar policy to prevent fashion brands on Taobao from selling on JD.com. As a result, JD.com’s apparel business never really took off, according to an executive from tech-focused think-tank Hatun. But now, you’ll be able to find your favorite fashion labels on both Taobao and JD.com.

Alibaba’s Taobao and Tmall may represent the standard for e-commerce in China, but standards are fleeting. With lower-tier cities moving increasingly towards community group-buying models as championed by Pinduoduo, and JD.com chipping away at Alibaba’s market share in the premium and first-tier urban segments, Alibaba has gradually found itself getting caught in the middle. And while China’s “middle” is still massive and wildly profitable (and Alibaba still reigns there), e-commerce isn’t growing as rapidly in that space. With more than 750 million active users, saturation is in sight. Continue to read the full article here

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