Despite generating a phenomenal $74 billion, the Alibaba Singles Day shopping extravaganza fell far short of its $100 billion plus estimated prize purse.
This was the eleventh edition of the annual Singles day shopping bonanza, a Chinese based e-commerce event which generates tens of billions of dollars in online sales. It has surpassed the US’s four-day equivalent splurge which has run from Black Friday through to Cyber Monday, since 2016 and is doing so by an ever-widening margin each year.
The online shopping event was always going to be a little different this year as a result of the pandemic, but Jack Ma’s Alibaba e-commerce empire was well prepared and had anticipated a huge shift to livestreaming to keep consumers engaged and spending. But recent interventions from Chinese Authorities overshadowed proceedings and appear to have dimmed the lights on the shopping spree.
On the eve of Jack Ma’s record breaking $35 billion IPO of ANT Group, Chinese authorities had called in the Alibaba founder, and put the brakes on the launch of the FinTech giant. Beijing Authorities have taken a stand to curb monopolistic practices in the internet sector, which has resulted in a selloff in shares of Alibaba and its peers like Tencent.
Big Tech is under ever-increased scrutiny around the world. Earlier this year, Google was sued by the US Department of Justice for abusing its monopoly position in search activities, and a Biden presidency promises increased scrutiny and fresh legal challenges to the practices of Silicon Valley’s leading lights. Meanwhile the European Union is also weighing in and accusing Amazon of breaching antitrust rules.
China’s move to curb the activities of its own rapidly growing tech sector – particularly those of iconic Alibaba founder Ma – is unusual given that last month the Communist Party endorsed President Xi Jinping’s latest 5-year plan to make the country a technological powerhouse. Innovation and technological self-sufficiency are the pillars upon which the Chinese economy will be built. Becoming self-reliant in the production of chips, which are the building blocks for innovations from AI to 5G networking and autonomous vehicles, is seen as key.
Clearly Xi does not regard these new anti-monopoly rules and curbs upon China’s most successful tech entrepreneurs to be something that will undermine his over-riding ambition to build China into a global technology leader. But given the authorities ability to rapidly change the regulatory landscape, the future for China’s tech billionaires to continue to grow and innovate seems less certain.