The Chinese government is preparing a bill that will challenge e-commerce platforms with technology companies across the country. Even though all the details of the 22-page bill are unknown, even this news turned the markets upside down. Because the statements made a total of $ 200 billion reduced the share values of giants such as JD.com, Xiaomi, Alibaba, Tencent and Meituan.
The Chinese government is trying to make a new regulation in order to control the e-commerce market in the country. The regulatory efforts initiated after the e-commerce platforms, which were growing with the pandemic, disturbed the government, are expected to affect Alibaba, Ant Group, Tencent and Meituan most. Meituan is one of China’s largest food ordering platforms.
Bloomberg, in an information shared last week, announced that the total financial value of Alibaba, Ant Group and Tencent exceeded $ 2 trillion. This amount is far above the financial value of the Bank of China, which is run by China, and the government is apparently not happy with this situation. The details in the draft prepared are the clearest indicators of this situation.
Bill decision upset China’s “Singles Day”
November 11 is an important day for China. As part of Singles Day, celebrated across the country, people shop more than they have ever done and help set huge records. Government officials, who already knew the developments that will take place today, announced the bill just before the campaigns started. The statements made a total of $ 200 billion reduced the share values of JD.com, Xiaomi, Alibaba, Tencent and Meituan.
So, with what kind of bill did the Chinese government affect the industry so much?
The bill, which the Chinese government is preparing to implement, is 22 pages long. The bill prepared by the Market Regulatory Authority (SAMR) affects technology companies in particular. In fact, Chinese sources say this is the first time such an initiative has been made. The government states that these regulations will protect the competition.
According to the bill, giant companies will not be able to share consumers’ sensitive information with each other. In addition, the cooperation between giants will prevent small sellers from being removed from the market. On the other hand, technology giants will not be able to force small businesses to make agreements with them from now on. Some accusations, especially against Alibaba, revealed that the e-commerce giant is pushing small companies.
What happened that the government decided to corner the tech giants?
We have already said that the Chinese government is uncomfortable with the unprecedented growth of e-commerce platforms and tech giants. But that’s not the only thing that bothers the government. So much so that two thirds of China’s e-commerce market is in the hands of Alibaba and JD.com. In addition, the mobile usage rate of Alibaba in the country with a population of 1 billion 400 million has exceeded 800 million. Ant Group, also partially owned by Alibaba, owns China’s largest digital payment method Alipay. In addition, Tencent, known as the world’s largest gaming company, also has its own digital payment system, which is shown as one of Alipay’s strong competitors.