🐜 Why Ant Wants To Wriggle Out Of Alibaba’s Cave
In moves that would have been inconceivable two years ago, Ant and Alibaba have started to restrict access to each other’s services, compete for clients and even strike alliances with rivals.
Although, back in 2011, the two Jack Ma-founded companies had spun off from each other, they continued to collaborate closely. They even functioned as one company in some aspects to maximise their synergies.
The two are now untangling their operations from each other and independently seeking new business due to the sweeping technology sector clampdown. This has sliced hundreds of billions of dollars off their value and led to a record $2.8 billion fine for the e-commerce giant.
Ant Wants A Free Fly
The subsidiary, Ant, blames its parent company’s close ties as a major selling point when it was prepping to launch its $37 billion IPO. Beijing unexpectedly pulled the plug on the float in late 2020.
Ant now wants to throw off the shackles as it expands overseas. As a matter of fact, the two companies, which once shared synergies, will now have a conflict of interest since Alibaba is building a cross-border transaction tool that could compete with Ant.
Ant operates China’s ubiquitous mobile payment app Alipay, which has more than 1 billion users. Meanwhile, its parent, Alibaba, counts around 1.3 billion annual users across its marketplaces who scored $1.3 trillion in gross merchandise value (GMV) for FY21–22. It also forayed into other businesses ranging from cloud services to video streaming to travel bookings.
A Good Friendship (What Once Was)
Alibaba and Ant have co-invested in a number of deals like the ride-hailing company Didi Chuxing (now called Didi Global) back in 2016.
The two also led a round of financing of $280 million into bike-sharing startup Hello Inc. They also previously held stakes in homegrown Paytm.
Too long? Here’s a one-liner: Alibaba and Ant to untangle operations and seek new business independently amidst China’s regulatory crackdown and conflict of interests.
Liked this piece? Make sure to check out the OG Newsletter that these news pieces are a part of at www.brandxhood.com. Catch more detailed news updates, casual meme-spiration, gentle productivity reminders, and much more, directly to your inbox daily at 7 AM.