The government on Saturday said Alibaba had used anti-competitive practices in its online retail market.
The fine was equal to about 4% of Alibaba’s annual sales in China, according to Xinhua News, a quasi-state media outlet. Local news reports said the company would be required for three years to complete “self-inspection” reports that it would then submit to the watchdog.
“Alibaba accepts the penalty with sincerity and will ensure its compliance with determination,” the company said Saturday in a press release.
It added: “To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation.”
The company also published an open letter to customers, saying it had “fully cooperated” with the investigation.
“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said.
The 18 billion yuan fine was a record for China, surpassing the $975 million fine issued to Qualcomm in 2015, as Reuters reported at the time.
Alibaba will hold a conference call on Monday to discuss the penalty.
Cathie Wood, the CEO of Ark Invest, said she sees growth potential in “disruptive innovation platforms” in China and that they are competing with similar ventures in the US now. Chinese tech stocks have been trending downwards recently as they face legal and regulatory pressure.
Speaking at a webinar in collaboration with Li Yimei, chief executive of China Asset Management this month, she discussed China’s commitment to innovation and said the country’s platforms have made huge progress in area such as DNA sequencing, energy storage, artificial intelligence, blockchain and robotics, especially relating to productivity, “which is good for the entire economy,” IgnitesAsia quoted Wood as saying.
Wood, through her ARK Invest exchange-traded fund, was one of the top performing asset managers of 2020, thanks in large part to her bets on disruptive technology.
She said many Chinese platforms are now close competitors to those in the US, after having caught up in recent years. “Competition in technology is a really good thing, in terms of moving the technology forward faster than otherwise would have been the case,” she said.
She said she was impressed with the government’s collaboration with the private sector, as she believes this will further the development of microchips and artificial intelligence.
Wood also said it reflected the government’s commitment to electric vehicles “I’m very impressed that China allows Tesla into the country without a local manufacturer. It is so determined to have electric vehicles proliferate throughout China,” she said.
Chinese tech shares have tumbled recently. The Hang Seng Tech index, which contains a number of big Chinese tech names such as Alibaba, Tencent, and FoxConn, is one of the worst performers from among the major indices this year, with a loss of almost 3%, versus a 1.5% gain in the tech-heavy Nasdaq 100.
Wood’s Ark Invest published a note this week saying “Chinese technology companies are caught in political crosscurrents”, referring to the developments that have been causing stocks to crash. Ark Invest believes they will only cause “short term turmoil” and said “policies might accelerate or hinder the pace of innovation for a time, but we believe self-preservation probably will bring policymakers back to both tables.”
Crypto whiz kid Justin Sun has shot to fame in recent years for postponing a $4.6 million charity lunch with Warren Buffett, investing $10 million in GameStop during the buying frenzy, and losing out on a $69 million NFT during a Christie’s auction.
Sun is the boss of Tron and BitTorrent, the 28th and 63rd biggest cryptocurrencies with a combined market capitalization of more than $5 billion.
Here are eight things to know about the 30-year-old tech entrepreneur:
A protégé of Alibaba founder Jack Ma
Justin Sun is a protégé of Alibaba founder and executive chairman Jack Ma. Sun’s oldest photo on Instagram shows him receiving a certificate from Ma. “Inspired by the best to shape the future for the better,” the caption reads.
Sun was the youngest member of the inaugural class at Hupan University, a Chinese business school founded by Ma in 2015, according to the South China Morning Post. Ma recruited 30 students who he believed could revolutionize the Chinese business world. Sun wrote his thesis on the blockchain industry, titling it “The Birth of a Decentralized Internet,” SCMP said. He graduated from Hupan in 2018.
Sun joined Ripple Labs as a chief representative and adviser in Greater China at the end of 2013, according to his LinkedIn page. He worked at the cryptocurrency startup — which has received backing from Google Ventures, Andreessen Horowitz, and other blue-chip investors — for just over two years. Sun also founded Callme or Peiwo, China’s largest voice live-streaming app, in 2013.
In July 2017, Sun founded the Tron Foundation, a blockchain company with its own cryptocurrency that is “dedicated to building the infrastructure for a truly decentralized Internet,” his LinkedIn page states. Less than a year later, Tron acquired BitTorrent, a peer-to-peer file-sharing service, for around $126 million, according to TechCrunch. Sun currently serves as CEO of Peiwo, Tron, and BitTorrent, now known as Rainberry.
Sun planned to use his meal with Buffett to convert the notorious skeptic of bitcoin and other cryptocurrencies into a true believer. Buffett has said Bitcoin has “no unique value” and will ultimately become worthless, and derided it as a “delusion” and “rat poison squared.”
Sun executed a full-court press on Buffett during their dinner in January 2020. He invited eToro founder and CEO Yoni Assia, Litecoin creator Charlie Lee, and other crypto advocates to dine with them. He also gave Buffett a smartphone loaded with bitcoin and Tron, although Buffett later said he doesn’t own any cryptocurrencies.
A controversial figure
After Sun announced he was rescheduling his lunch with Buffett, Chinese news outlet Caixin reported he was being held in China over accusations of illegal fundraising, gambling, money laundering, and pornography activities, citing a report by the 21st Century Business Herald.
Sun dismissed the allegations on Weibo and said he was being treated for kidney stones. “The illegal network fundraising was not true,” he wrote in Mandarin, adding that Tron “actively cooperated” with authorities to comply with regulatory requirements. He added that Tron complied with laws and regulations in Singapore, where it’s located, and the money-laundering allegation was “not true.”
A meme-stock fan
Sun invested $10 million in GameStop and $1 million in each of AMC and the iShares Silver Trust during the meme-stock frenzy in January 2021. He told Bloomberg that the Wall Street Bets movement represented a “paradigm shift” in finance, and suggested memes are the new fundamentals for the next generation of investors.
A NFT proponent
Sun was the runner up in the record-breaking Christie’s auction of a $69 million non-fungible token (NFT) in March 2021. He tried to bid $70 million for the digital artwork after he was outbid with 20 seconds to go, but his offer wasn’t received by Christie’s systems.
For three months, Chinese billionaire Jack Ma has been keeping out of the public eye as China has cracked down on his businesses.
His sole public appearance was a 50-second video appearance at the end of January, during which he made brief remarks to rural teachers from across China.
But according to a Bloomberg report, the Alibaba and Ant Group founder was spotted playing golf at the Sun Valley Golf Resort in Hainan, China, in recent weeks. The upscale resort includes a 27-hole golf course, a clubhouse, and a restaurant.
Such clubs aren’t hard to find in Hainan, the island province in southern China that’s known as “the Hawaii of China” thanks to its tropical climate, luxurious beach resorts, and golf courses.
Here’s what it’s like to vacation in Hainan.
Hainan is China’s smallest and southernmost province, made up of more than 200 islands.
The main island is the 12,700-square-mile Hainan Island, which is home to about 9 million people and is a major tourist destination.
The Alibaba and Ant Group founder has reportedly been “lying low” in recent months as Chinese regulators cracked down on his businesses. Speculation on his whereabouts started when Ma failed to appear on the finale of the African talent show he created in November. In October, Ma had publicly criticized China’s banking rules.
Representatives for Ma’s companies did not immediately respond to Insider’s request for comment for this story.
The Sun Valley Golf Resort where Ma was reportedly seen includes a clubhouse, a restaurant and club bar, and a sauna.
The 27-hole course was designed by JMP Golf Design Group, a company that has designed high-end courses all over the world in countries including the US, France, Japan, Malaysia, and Mexico.
The club overlooks Yalong Bay near Sanya, a city on Hainan’s southern coast.
Sanya, Hainan’s most popular tourist destination, boasts more than 25 miles of coastline, a lively city center, and plenty of luxury hotels including a St. Regis, a Ritz-Carlton, a Rosewood, and an Edition hotel.
The Sun Valley Golf Resort where Ma was spotted is far from the only place to golf on Hainan. The island is home to multiple golf courses, and the temperate climate means it’s possible to play year-round.
Ma’s live-streamed video sent Alibaba’s Hong Kong shares up by as much as 8.5%. In the video, he can be seen addressing 100 rural teachers as part of a ceremony that recognizes exceptional educators in impoverished areas.
“Recently, my colleagues and I have been studying and thinking. We made a firmer resolution to devote ourselves to education philanthropy,” Ma said in the clip, according to Bloomberg. “Working hard for rural revitalization and common prosperity is the responsibility for our generation of businessmen.”
The billionaire, who is a former English teacher, seemed to embrace themes promoted by China’s Communist Party, Bloomberg said. He spoke about shrinking income disparities through a return of younger talent to rural areas.
A spokesperson for the Jack Ma Foundation told Insider Ma had participated in the event on January 20 and confirmed the authenticity of the video clip.
Ma had seemingly disappeared from public view about two months ago after he publicly snubbed China’s regulatory system, saying the nation’s rules do not help foster innovation. He even criticized regulatory decisions to enforce a set of international banking rules as an “old man’s club.”
Soon after, China enacted new rules that clamped down on online financial lending, directly impact the lending business of Ma’s Ant Group. Regulators ordered Ant to overhaul its business and return to its origins as a payment service after officials accused the company of “turning a blind eye” to requirements.
In the video call, Ma, who used to be an English teacher, spoke to 100 rural teachers across China as a part of his Jack Ma Rural Teachers Award ceremony, which recognizes outstanding teachers in impoverished and remote areas.
“Recently, my colleagues and I have been studying and thinking. We made a firmer resolution to devote ourselves to education philanthropy,” Ma said in the video, according to Bloomberg. “Working hard for rural revitalization and common prosperity is the responsibility for our generation of businessmen.”
A spokesperson for the Jack Ma Foundation told Insider that Ma participated in the online ceremony of the annual Rural Teacher Initiative event on January 20, but the time and date of the video have not been independently verified.
Questions began swirling about Ma’s whereabouts after the Alibaba and Ant Group founder failed to appear on the finale of the African talent show he created. Yahoo Finance reported on January 4 that Ma hadn’t been seen publicly in more than two months.
In October, the 56-year-old Alibaba founder had publicly criticized China’s financial regulatory system at a conference in Shanghai. The next month, Ma was replaced as a judge on the African talent show he founded, “Africa’s Business Heroes.” An Alibaba representative told Insider that Ma could no longer be on the judging panel, which was filmed in November but has not yet been released, “due to a scheduling conflict.”
Financial traders around the world are trying to get the scoop on Alibaba billionaire Jack Ma’s whereabouts, after media reports the tycoon hasn’t been seen in public for two months.
Traders are using their access to the powerful Bloomberg Terminal, which shows real-time financial data, to check out his profile, which shows his online status.
One trader told Business Insider that Ma’s profile has been offline for “three days at least.” His profile is now among the most-viewed on the terminal, indicating intense global trader interest in the story.
Ma has been conspicuously absence since the Chinese government commenced a regulatory crackdown on his businesses Alibaba and Ant Group.
The apparent disappearance of Jack Ma, the Chinese billionaire and Alibaba cofounder, has provoked curiosity not just on social media but among global traders who have been searching for his profile on Bloomberg’s terminal service for clues on his whereabouts.
Ma, whose net worth stands at $51.5 billion according to the Bloomberg Billionaires Index, has not been seen in public for two months. His absence comes amid a Chinese regulatory clampdown on his businesses.
Bloomberg Terminal, often touted as one of the most powerful machines in the world, is a paid service that gives its users access to a range of financial data from daily breaking news to charts, lists, and company information. It is widely used by banks, financial firms, and media outlets.
Bloomberg’s software is known for its powerful features – but one more light-hearted function is the “MVP” or most-viewed profile. Each trader on the terminal has a personal profile which also shows when they are online, via a green dot. Traders can also chat with each other via their profiles.
The most-viewed function lets traders see who their peers are reading and talking about on a monthly, weekly, and daily basis. Traders say this is a must for those who want to be plugged into gossip.
Amid rumors of his disappearance, the MVP of the week is currently Jack Ma, with traders around the world checking out the Alibaba billionaire’s status on the Bloomberg chat function (he remains firmly offline.)
“I have checked out his profile in the past out of curiosity and have seen him online. So it’s pretty bizarre that he hasn’t been online lately,” one trader told Business Insider on the condition of anonymity.
Jack Ma’s profile on the terminal was the second-most viewed on Wednesday, after that of Credit Suisse’ Global head of equity sales, Lucy Baldwin, Business Insider understands. Ma’s profile saw more than 700 hits as of Wednesday morning.
His profile is the third-most viewed profile this month, with his profile seeing over 2,100 hits since the start of January. And it’s the most viewed profile this week with more than 1,800 hits.
The source added that there is growing interest among the trader community on his whereabouts. “Memes, conspiracy theories as well as his offline Bloomberg profile status are being actively shared in WhatsApp groups. Everyone is interested to know where he is.”
Another trader, based in Australia, told Business Insider on the condition of anonymity that they have also checked out Ma’s profile a number of times on the Bloomberg terminal in the hope of seeing him online there. “He has been offline for the past 3 days at least. I have checked out his profile a number of times.”
Ma’s offline status on Bloomberg doesn’t give any clues on his whereabouts – “he may be on holiday,” as one trader said – but the mystery of his whereabouts has captivated the public.
On Sunday, Yahoo Finance reported that Ma hadn’t been seen publicly in more than two months. He also missed an appearance in November on a TV talent show that he had founded, The Financial Times reported.
CNBC’s David Faber on Tuesday said Ma hasn’t gone missing but is lying low.
“He is being less visible, purposefully,” Faber said after noting that he has closely covered Ma and his businesses. “And you can expect for that to be the case for some time,” Faber said, citing sources.
Ma recently sparred with Chinese officials over Ant’s planned initial public offering and the size and scope of Alibaba. The IPO has since been shelved and Alibaba is being investigated by antitrust regulators.
The billionaire Alibaba and Ant Group founder is facing a crackdown from Chinese regulators that has resulted in an antitrust investigation, a suspended IPO, and Ma losing $12 billion of his fortune in just a few months.
This isn’t the first time Ma has faced adversity, however: He grew up poor in communist China, failed his university entrance exam twice, and was rejected from dozens of jobs, including one at KFC, before finding success with his third internet company, Alibaba.
Here’s how Ma got his start and made his fortune.
Jillian D’Onfro, Charles Clark, and Taylor Nicole Rogers contributed to an earlier version of this post.
Jack Ma – born Ma Yun – was born on September 10, 1964, in Hangzhou, southeastern China. He has an older brother and a younger sister.
After President Nixon visited Hangzhou in 1972, Ma’s hometown became a tourist destination. As a teenager, Ma started waking up early to visit the city’s main hotel, offering visitors tours of the city in exchange for English lessons. The nickname “Jack” was given to him by a tourist he befriended.
After high school, he applied to go to college – but failed the entrance exam twice. He finally passed on the third try, going on to attend Hangzhou Teachers Institute. He graduated in 1988 and started applying to as many jobs as he could.
He received more than a dozen rejections – including from KFC – before being hired as an English teacher. Ma was a natural with his students and loved his job – though he only made $12 a month at a local university.
Ma had no experience with computers or coding, but he was captivated by the internet when he used it for the first time during a trip to the US in 1995. He had recently started a translation business and made the trip to help a Chinese firm recover a payment. Ma’s first online search was “beer,” but he was surprised to find that no Chinese beers turned up in the results. It was then that he decided to found an internet company for China.
Though his first two ventures failed, four years later, he gathered 17 of his friends in his apartment and convinced them to invest in his vision for an online marketplace he called “Alibaba.” The site allowed exporters to post product listings that customers could buy directly.
Soon, the service started to attract members from all over the world. By October 1999, the company had raised $5 million from Goldman Sachs and $20 million from SoftBank, a Japanese telecom company that also invests in technology companies. The team remained close-knit and scrappy. “We will make it because we are young and we never, never give up,” Ma said to a gathering of employees.
He was known for maintaining a sense of fun at Alibaba. In the early 2000s, when the company decided to start Taobao, its eBay competitor, he had his team do handstands during breaks to keep their energy levels up.
In 2005, Yahoo invested $1 billion in Alibaba in exchange for about a 40% stake in the company. This was huge for Alibaba – at the time it was trying to beat eBay in China – and it would eventually be an enormous win for Yahoo too, netting it $10 billion in Alibaba’s IPO alone.
In 2014, Ma told Bloomberg he knew Alibaba had made it big when another customer offered to pay his restaurant bill. The customer, Ma said in the interview, had left Ma a note that read: “I’m your customer of Alibaba group, I made a lot of money and I know you don’t make any money. I’ll pay the bill for you.”
The company’s $150 billion IPO was the largest offering for a US-listed company in the history of the New York Stock Exchange. It also made Ma the richest person in China, with an estimated worth of $25 billion at the time.
Alibaba employees threw a big party at the company’s Hangzhou headquarters to celebrate the IPO. One employee even took the party as the perfect opportunity to propose. Ma told employees at a press conference that he hopes they use their newfound wealth to become “a batch of genuinely noble people, a batch of people who are able to help others, and who are kind and happy.”
The biggest day in the calendar for Alibaba is China’s “Singles’ Day” – a retaliation to Valentine’s Day – which supposedly celebrates the country’s singletons. In 2016, the site recorded nearly $20 billion in sales in 24 hours.
Alibaba’s success may have made Ma an extremely wealthy man, but he has made very few flashy purchases, and he still has some pretty modest hobbies. “I don’t think he has changed much, he is still that old style,” Xiao-Ping Chen, a friend of Ma, told USA Today. He likes reading and writing kung fu fiction, playing poker, meditating, and practicing tai chi.
One of his greatest passions is the environment. According to Fortune, Ma developed an interest in environmentalism when a member of his wife’s family became sick with an illness that Ma suspected was caused by pollution. He sits on the global board of The Nature Conservancy and spoke during a session of the Clinton Global Initiative in 2015. He has also, according to Fortune, been instrumental in funding a 27,000-acre nature reserve in China.
In 2017, Ma made headlines after meeting President Donald Trump. Despite Trump’s protectionist attitude towards trade, Ma said China and the United States were not about to be drawn into a trade war. “Give Trump some time. He’s open-minded,” Ma told a panel at the World Economic Forum in January 2017.
Ma is something of a celebrity in China, and crowds of people show up to listen to him speak. The company also hosts annual talent shows, and Ma is a natural entertainer. At a company anniversary event, he dressed up as a punk rocker for a performance in front of 20,000 Alibaba employees.
Company lore has it that Ma came up with the name “Alibaba” while sitting in a San Francisco coffee shop. In “Ali Baba and the Forty Thieves,” a secret password unlocks a trove filled with unbelievable riches. Ma’s company has, in a way, revealed the potential of small and mid-sized businesses across the globe.
Ma stepped down as Alibaba’s chairman on September 10, 2019, his 55th birthday. The company threw him a farewell party in an 80,000-seat stadium in Hangzhou, and Ma performed with other Alibaba executives.
In May, SoftBank announced that Ma would resign from the troubled investment fund’s board of directors.
“Stepping down from SoftBank Group’s Board, I believe, and he said to me actually, was something that he decided on his own,” SoftBank CEO Masayoshi Son said during the firm’s earnings announcement. “That’s sad, but we still keep in contact directly and right before the COVID-19, we met face-to-face every month to have dinner, to talk about businesses, to talk about lives. And we will remain friends for the rest of our life, I believe.”
In October, Ma made headlines again in relation to Ant Group’s highly anticipated IPO. Ant Group was expected to raise $37 billion with a valuation reportedly surpassing $300 billion. But then, Ma publicly snubbed China’s financial regulatory system, calling it ‘an old people’s club.’
Soon after, regulators introduced new online lending rules that directly impacted Ant’s business. Officials then said there were “major issues” with Ant’s listing, and by November, the IPO was suspended.
In the months since, Ma, China’s richest person, has seen his net worth tumble $12 billion, from approximately $62 billion to $50.1 billion, according to Bloomberg’s Billionaires Index. He is now the fourth-richest person in China and the 25th-richest person in the world.
In January, Yahoo Finance reported that Ma hadn’t been seen publicly in more than two months and had been replaced as a judge on the TV talent show he founded, which raised the question of whether Ma had gone missing.
Ma’s absence mirrored similar situations where Chinese businessmen had disappeared after battling with regulators, but multiple sources now say that Ma is not missing – he’s simply “laying low” amid the government scrutiny and new regulations.
Ant Group’s planned November IPO was scrapped after Chinese authorities amped up its regulatory pressure on the fintech giant. The company is now back at the drawing board in terms of adopting significant regulations it must become compliant with, potentially altering its business model.
The ramp up in regulatory pressure in Ma’s businesses came weeks after Ma criticized China’s financial regulatory system at a conference in Shanghai. Ma reportedly dismissed the China’s global financial regulations as “an old people’s club” and said that “we can’t use yesterday’s methods to regulate the future.”
Ma has not been seen in public in more than two months and he was abruptly replaced as a judge on an African entrepreneurship TV show he founded late last year, called Africa’s Business Heroes, according to a report from Yahoo Finance.