Alibaba, China’s leading e-commerce platform, is struggling with increased regulation by the Communist Party and the rise of competitors, with its number of active buyers surpassed late last year by Predo, which was founded only six years ago. In the face of increased competition in the e-commerce market, Alibaba CEO Zhang Yong told employees in February that the company would be battling Food delivery service Meituan, Predo, and Byte Jump, which made a full-fledged foray into e-commerce last year.
In the face of increased competition in the e-commerce market, Alibaba CEO Zhang Yong told employees in February this year that the company would fight against food delivery services Meituan, Qandoduo and Byte Jump, which became fully involved in e-commerce last year. Pictured is Alibaba co-founder Jack Ma. (AFP)
The Nikkei newspaper reported today (19) that Alibaba is facing challenges from emerging rivals in the e-commerce market, such as Jindo, which uses group buying as its buying model and whose number of active buyers has increased 35% annually to 788.4 million at the end of 2020, surpassing Alibaba’s 779 million in the same period. The report noted that although Alibaba’s e-commerce market share in China is still about 50 percent, dominating the market in large cities, with higher prices and a broader product lineup, Alibaba still feels threatened, with CEO Zhang Yong telling employees in February that the company’s three biggest rivals this year are Meituan, Jindo and Byte Jumping.
The report points out that Alibaba may be difficult to deal with its rivals, although the company has made delivery App as the main growth driver, but Alibaba’s delivery service “hungry” market share, still much smaller than Meituan. Alphabet jumped into e-commerce last year and launched its mobile payment service in January, building on the company’s services, which have more than 600 million users in China. In terms of business models, including Jindo, Meituan and Jingdong have launched similar group-buying services, but Alibaba was only able to set up a dedicated community group-buying division earlier this year.
In addition, Alibaba is also facing regulatory pressure from the Chinese Communist Party authorities, with its Hangzhou headquarters being raided by regulators last December and rumors that it may be subject to the highest-ever anti-monopoly fine of $975 million from Chinese regulators. With Chinese President Xi Jinping saying this week1 that he wants to oppose monopolies, prevent the disorderly expansion of capital and ensure the healthy development of the platform economy, reports suggest that the pressure on Alibaba may continue to grow.
Shares of Alibaba’s Hong Kong-listed stock fell more than 10 percent from Feb. 17 to 18 of this year.
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