Alibaba Group on Tuesday decided to shut down its music streaming platform Xiami Music after consistent targeting of the e-commerce behemoth by the Chinese regulators over alleged monopolistic practices.
Alibaba’s music arm announced that Xiami music platform’s services will be halted from next month onwards. This shutdown will translate into a major setback for Alibaba as its plan to enter the Chinese entertainment industry will take a hit.
"Due to operational adjustments, we will stop the service of Xiami Music from February 5,” the music arm of Alibaba said in a statement.
Alibaba had acquired the online music streaming app back in 2013 and invested millions of dollars in it in order to compete with other music streaming services and enter the Chinese entertainment industry.
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According to Beijing-headquartered data intelligence company TalkingData, Alibaba’s efforts in Xiami failed to pay off as only 2% of the entire Chinese population used its music streaming platform. It lagged behind other music streaming competitors like KuGou Music, QQ Music, KuWo, and NetEase Cloud Music.
The business scale down from Alibaba Group hasn’t come off as a surprise as the Chinese regulators have been targeting Jack Ma’s business empire ever since he criticised the government of China alleging that the Chinese Communist Party (CCP) is trying to gag innovation with its policies in the country.
This resulted in a severe crackdown on Ma’s wealth and saw a major change in activities in all the companies running under him.
Jack Ma’s Ant Group was also caught in the fiasco after its Initial Public Offering (IPO) in Shanghai and Hong Kong got cancelled just two days before its debut, thanks to the Chinese officials. Furthermore, a report said that the Ant Group has been planning to fold its financial operations into a holding company so that it could be regulated like a bank.
The report also said, "The move might cripple the growth of the fintech giant's most profitable units.”
Ever since this crackdown, Jack Ma has not made a public appearance.
