Jack Ma's Alibaba starts scaling down businesses, to shut music app next month1 min read . Updated: 05 Jan 2021, 01:43 PM IST
Alibaba acquired the music streaming app Xiami in 2013 with an ambition to push into China's entertainment industry. Last month, as Chinese regulatory bodies threatened to throttle its businesses over alleged monopolistic practices, the company started planning to scale down businesses.
Alibaba Group, which came under the regulatory scanner for alleged monopoly practices, will shut down its music streaming platform Xiami Music next month, stepping back from its ambitious aim to enter China's entertainment industry.
"Due to operational adjustments, we will stop the service of Xiami Music from February 5," Alibaba's music arm announced on Tuesday on its Weibo account. Alibaba acquired the online music app in 2013 and invested millions to compete in China's online music business.
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Its efforts however have not paid off and the app currently only has 2% of China's music streaming market, behind KuGou Music, QQ Music, KuWo, and NetEase Cloud Music, according to Beijing-headquartered data intelligence company TalkingData.
Earlier in December, a Bloomberg report said, Jack Ma’s Ant Group is planning to fold its financial operations into a holding company that could be regulated more like a bank. The fintech giant is planning to move any unit that would require a financial license into the holding company, pending regulatory approval. The move came after Chinese regulators threatened to throttle the company's businesses over alleged monopolistic practices.
The report also said "The move might cripple the growth of the fintech giant's most profitable units"
People's bank, the country's central bank, late last month, summoned Ant executives and asked them to rectify its business module by complying with the country's regulatory requirement. It also asked the company to continue as a provider of payments services, the way it had started out, threatening to throttle growth in its consumer loans and wealth management businesses.
In a statement released by the central bank, it said Ant Group lacked a sound governance mechanism, defied regulatory compliance requirements and engaged in regulatory arbitrage. The company used its market position to exclude rivals and hurt the rights and interests of consumers.
Regulators ordered Ant Group to establish a financial holding company and hold sufficient capital. They also said that Ant Group should return to its payments origins, enhance transparency around transactions and prohibit unfair competition.
Responding to that Ant Group said that it would comply with regulatory requirements and enhance risk management and control, and that a working group would be set up to make the necessary rectifications.
(With inputs from agencies)