In China, there's no such thing as 'too big to fail'

NOT much is known about where Jack Ma is since his reported disappearance. And only time will tell about the implications on China's entrepreneurial landscape. But what emerges is that in China, no one is too big to fail. The State Administration of Market Regulation (SAMR) had announced two weeks ago that it had begun an anti-monopoly investigation into Alibaba. The complaint centres on having merchants to sell products exclusively on Alibaba. It's a practice commonly known as "picking one from two".

Regulators are also looking at Ant Group, the fintech company one-third owned by Alibaba. Its US$37 billion IPO, which was expected to be the biggest initial public offering ever, had recently been cancelled. Regulators are examining whether to treat Ant more like a bank and regulate it that way, or to break it apart.

From Dec 24-28, Alibaba's valuation fell by 13 per cent, or US$91 billion. This happened despite the US$6 billion in share buybacks aiming to avert the slide. The decline in Alibaba's share price also weighed on other Internet and technology companies. Games publisher and dominant social network operator Tencent Holdings, e-commerce giant JD.com and on-demand services giant Meituan all felt the heat.