Alibaba group have recently reported another strong quarter as revenue increased 37% year-over-year to reach RMB221 billion and annual active consumers and GMV of their China retail marketplaces continued to grow. With this announcement, Alibaba Chairman and CEO Daniel Zhang addressed investors to talk about a hot topic, China’s changing regulatory landscape.
Regulators in China are making proposals that aim to regulate large tech companies within the country. In December 2020, Alibaba Group received a notice of an investigation from the State Administration for Market Regulation that it had commenced an investigation pursuant to the PRC Anti-monopoly Law. This is currently ongoing with Alibaba group’s full cooperation.
Ant Group
This past quarter, Alibaba has also experienced the suspension of Ant Group’s IPO. Ant Group is now in the process of developing its rectification plan, which according to Zhang will go through the relevant regulatory procedures.
“Therefore, Ant Group’s business prospects and IPO plans are subject to substantial uncertainties. Currently, we are unable to make a complete and fair assessment of the impact that these changes and uncertainties will have on Alibaba Group.”
– Daniel Zhang, Chairman & CEO, Alibaba group
Zhang has also commented on those seemingly concerned about how this would impact consumer spending on China retail marketplaces and is keen to highlight the fact that credit availability is not a key motivator for consumers shopping on the marketplaces.
“Availability of credit is not a major reason that motivates consumers to shop at our China retail marketplaces; they are attracted by our comprehensive and high-quality product and service offerings; our competitive pricing; and our ability to satisfy and stimulate consumption needs.”
– Daniel Zhang, Chairman & CEO, Alibaba group
From the statement, it looks like the challenges faced by China’s changing regulatory landscape are seen as important opportunities for Alibaba to reassess and improve business practices.
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