Tech titans Tencent and Alibaba have been at the vanguard of China’s e-commerce revolution.
But now they are coming under increased pressure after Beijing announced a raft of regulations last month, including tougher online antitrust measures.
Billionaire entrepreneur Jack Ma and his Alibaba empire have already been targeted by the ruling Communist Party.
Next on the list appears to be Pony Ma, who is no relation to Jack, and his Tencent juggernaut. The company’s tentacles reach into online video gaming, internet shopping and fintech through mobile payment platforms.
At the heart of the operation is the social media site WeChat, which has around one billion monthly users. Tencent also owns 30% of the micro-lending business WeBank. Just like Alibaba’s Ant, it also runs services that compete with the traditional state-run banking sector.
“Pony Ma [has] met with China’s antitrust watchdog officials this month to discuss compliance at his group, two people with direct knowledge said. The meeting is the most concrete indication yet that China’s unprecedented antitrust crackdown could soon target other internet behemoths,” the Reuters news agency reported.
- Beijing aims to strengthen oversight of China’s Big Tech.
- Tencent has a market capitalization of US$776 billion.
- It ranks among the world’s largest and most valuable companies.
- But concerns are growing it has stifled competition.
- Fears about consumer data have also been cited, Reuters revealed.
- The move comes after Alibaba affiliate Ant was targeted.
- Beijing has since started to look at Alibaba’s media assets.
- They include the Twitter-style Weibo social media platform.
- Other investments in the regulatory crosshairs include the YouTube-clone Youku Tudou, entertainment portal Alibaba Pictures and video-sharing Bilibili.
Background bytes: Wu Zhenguo, the head of the State Administration of Market Regulation, has allegedly raised concerns about aspects of Tencent’s business practices.
What was said: “[Wu] asked the group to comply with antitrust rules, one person said,” Reuters reported.
Delve deeper: Tencent’s financial services business is worth an estimated $120 billion. Net profit for the entire group was 59.3 billion yuan or $9.1 billion in the fourth quarter of 2020, a jump of 175% compared to the same period in 2019.
China Factor comment: Beijing has made it clear that Big Tech needs to slim down. If they refuse, the Party will put them on a regulatory diet.