The Chinese government has requested for Alibaba to sell its media assets, which includes South China Morning Post. According to The Wall Street Journal which quoted its sources, this move comes as Chinese officials become increasingly concerned with Alibaba's influence over public opinion in China. Discussions over Alibaba potentially divesting its media assets have been held since early this year following a review of the eCommerce giant's media assets.
WSJ added that "officials were appalled" at how widespread its media interests have grown and reportedly requested for Alibaba to come up with a plan to "substantially curtail" it. Alibaba is widely known for its stake in SCMP which the former acquired in 2015 for US$266 million.
The acquisition covered the daily newspaper along with a stable of magazines including Harper's Bazaar and The Peak, recruitment services, outdoor media, events, education and digital media businesses. It also bought an approximately 18% stake in Sina Weibo for US$586 million in 2013, multiple media outlets including Bloomberg reported then. MARKETING-INTERACTIVE has reached out to Alibaba for comment.
Alibaba and its co-founder Jack Ma have come under scrutiny in the past months, after Ma incurred the wrath of Chinese regulators last October, resulting in the abrupt suspension of Ant Group's IPO last November. Ma said in a speech that traditional banks should move away from their "pawnshop operating model" and questioned if international financial regulations are fit for the Chinese economy.
A month later, China's State Administration for Market Regulation launched an antitrust investigation into Alibaba and the Chinese central bank, along with regulatory agencies responsible for securities, banking and insurance, decided to meet with Ant to persuade the company to put in place financial regulations and other rules, WSJ said. Just last week, Ant Group CEO Simon Hu resigned.
Meanwhile, Alibaba is also reportedly facing an impending fine of more than US$975 million by antitrust regulators over alleged anti-competitive practices on its eCommerce platforms, WSJ previously reported. Besides eCommerce and media, Alibaba has also built up its entertainment division to include Alibaba Pictures Group and Youku Tudou.
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