China's Tech Titans Suppressed by New Antitrust Guideline

On 10 November, the Chinese State Administration for Market Regulation published the draft version of 'Antitrust Guidelines on the Platform Economy,' targeting the largest Chinese tech titans like Alibaba, Tencent, Meituan's market power in some areas. The guideline is to curb monopolistic behaviors in the field of the Internet platform economy. It set out unregulated conducts, for example, unfair prices, lower than the cost selling, deal decline and different treatment to consumers. Behavior such as WeChat (from Tencent) banning Tik Tok's or Taobao's links may be illegal, according to the draft. The guideline has resulted in BABA declining by around 9.5%, Tencent dropping by about 9.4%, Meituan and JD.com sinking by 9%, 7.3% respectively within two days from the time of the report. Alibaba and Meituan are the 'victims' because of their incredible market shares and power. According to Equalocean's research, Alibaba owned 50.1% cake of China's E-commerce business in 2019. Based on Trustdata, Meituan grabbed the lion's share of 65% in the Chinese delivery food area over the same period. Alternatively, CITIC Securities' analysts believe that the announcement harms Tencent the least as its market shares in related sectors have not let the company reach significant monopolistic positions. It may affect WeChat, but in gaming, advertisement, and finance landscapes, the social media giant hasn't dominated these spaces.

Alibaba: Solid 2Q 2020 Results as Stock Price Slips

Alibaba (09988:HK, BABA:NYSE) revealed its 2Q financials ending on 30 September, including revenue increased by 30% to CNY 155.10 billion, year-on-year. The primary growth consists of 26% and 60% rises in the core commerce business and cloud division. Apart from the topline, BABA showed decent profitability, hitting CNY 47.53 billion Adjust EBITDA. Under the GAAP rule, the net income was down by 63% to CNY 26.5 billion, which is topped by 44% based on the non-GAAP standard.   The stock price slid by 4.34% in Hong Kong's Friday trading session on the news. It was also dragged down by Ant's stalled IPO two days ago. Alibaba continues to expand all business lines. Core commerce revenue grew by 29% to CNY 130.92 billion, indicating many improvements. For example, the key performance indicator comprised of annual active consumers was 757 million by the end of Q3 2020, a net increase of 15 million. Tmall platform's gross merchandise value (GMV) grew 21% year-over-year. Besides, GMV generated by its live streaming portal 'Taobao Live' exceeded CNY 350 billion. BABA's other commerce businesses like wholesale, international commerce, logistics and local consumer services all saw decent expansions. Another key growth for the world's biggest online commerce company: Alibaba Cloud's revenue was up by 60%, hitting CNY 14.90 billion in this quarter, 10% of its total revenue. The company stated that it kept gaining traction from clients in the Internet, finance and retail sectors. By the end of Q3 2020, about 60% of public enterprises in A-share were using Alibaba Cloud. In addition, Alibaba's digital media and entertainment topline lifted 8% to CNY 8.07 billion; innovation initiatives and others also jumped by 10%.

Alibaba Loses Nearly USD 70 Bn as Ant Group Postpones IPO

On the eve of its behemoth IPO, on November 3, the listing plans of Ant Group (688688:SH, 06688:HK) were put on hold on both Shanghai’s Star Market and Hong Kong bourse. Also, it is said that Ant CreditPay (Chinese: 花呗) and Ant Cash Now (Chinese: 借呗) are being divested from the group due to the requirement of 're-valuation of value.' Late on November 2, a press release from China Security Regulatory Commission (CSRC) released the info that several state administratiors had interviewed the executives of Ant Group, including the actual controller, Jack Ma, the CEO Jing Xiandong and the president Hu Xiaоming, to discuss regulatory issues.  This might also be the reason for putting off the massive IPO. As an Internet company that deploys in the financial service industry, Ant Group's debut brings complex problems around supervision. Also, if the company goes public at the current valuation, the stock price will possibly drop, as stricter regulations are being put onto Internet fintech firms, something which ties up retail investors. It might be best, in the eyes of regulatory authorities, to postpone the plans so as to protect small investors.  The sudden news comes as a surprise, nonetheless. Alibaba (BABA:NYSE) opened 8% lower on Tuesday and it is actively running down, with around USD 67 billion in market capitalization lost. 

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Du Haitao, Manager of Tmall's Marketing Division to Leave

China's Fourth Telecom Operator Established, Alibaba as Second Shareholder

Having been long dominated by the three major telecom operators – China Mobile (CHL:NYSE, 00941:HK), China Unicom (CHU:NYSE, 00762:HK), and China Telecom (CHA:NYSE, 00728:HK), the Chinese telecom operator industry now has another player on the table, namely the China Broadcasting Network International. The company is partly state-backed and partly held by private companies such as Alibaba – that company's (BABA:NYSE, 09988:HK) investment arm, with equity percentage at 9.88% , constitutes the second-largest shareholder. Before the company's official establishment, the China Radio and Broadcasting group has already received the 5G network operation license from China's Ministry of Information and Technology (MIIT) in late 2019. The entrance of radio and broadcasting company into the telecom operator realm is inevitable, as the TV programs are transitioning from the local radio signal delivered to Internet-based. After the China Broadcasting participating in the operator business, it can be expected that the TV network in China can be the same as the mobile phone network, which breaks the current geographic constrains. The company will release SIM card numbers that start with '192' to the Chinese consumers soon. As part of the strategic agreement that the China Broadcasting reached with China Mobile, the users of the former, which currently only have the 5G network services provided, can also access the 4G network provided by China Mobile.

Jack Ma Steps Down as Director of Alibaba Group

Dada Break Its Record of Daily Order

Pinduoduo to Cultivate 50 New Cosmetics Brands in the Next Two Years

JD.com: Turnover Up 90% YoY on Double Eleven Day

JD: Air-Conditioning Orders Up 5 Times YoY During 'Double 11' Presale Period

Fruit Tea Drink Brand Sweet7 Nabs CNY 150 Million in Series A Round

Alibaba's 'Spring Thunder Plan' Helps Sell 800,000 Agricultural Products

JD.com: The Number of PLUS Members Exceeds 20 Million

Alibaba: 832 Counties Have Exceeded CNY 310 Billion in Sales in the Past 5 Years

Suning: Net Profit for the First Three Quarters to be CNY 503-753 Million

Pinduoduo: Agricultural Products' GMV to Exceed CNY 250 Billion in 2020