Jack Ma left Alibaba for good in 2019 when Chinese authorities were toughest on his internationally-oriented local businesses. Its exit from Ant Group underlines a rather surprising fact: with the current economic situation, it seemed that the government had let go of some ballast to leave its BATX (Baidu, Alibaba, Tencent, Xiaomi) alone. But in an article from wall street journalthe opposite has just been demonstrated.
This recalls a key, often overlooked point in the case between Jack Ma and the state. Too often summed up as a conflict of magnitude, of a desire to expand internationally, relations between the billionaire and the Chinese government were especially strained vis-à-vis the desire for financial liberalism on the part of of the founder of Alibaba. As French essayist and entrepreneur Charles Gave noted, “Currency is a state privilege. […] The Chinese don’t like financial liberalization because it helps to become independent from the state”.
But that’s all Ant Group was trying to do. In preparation for its IPO in November 2020, the Chinese company unveiled its new loan plan for individuals, a credit offer completely independent of the State, its securities and its supervision.
The shadow of itself
The cancellation at the last minute of what was to be the biggest IPO in history weighed heavily on its capitalization. In the columns of wall street journal, a journalist estimated that the company should have weighed for more than 300 billion dollars currently, thanks to a portfolio of one billion customers. It is estimated today at only 78 billion. “The unicorn is only a shadow of itself”judged Bloomberg in an editorial.
Without a stock market listing or control by Jack Ma, Ant Group will not follow the same ambitions and the government will be able to control its strategy all the more. According to the financial authorities, Ant Group should “go back to its roots in payments and bring more transparency to transactions; obtain the necessary licenses for its credit activities and protect the confidentiality of user data; establish a financial holding company and ensure that it has sufficient capital”.
A “rectification work”, as the teams of the company called it, which will occupy the Alibaba subsidiary all the time, at the expense of its IPO project. According to Bloomberg, this new strategy tends to make Ant Group like a simple bank, which would not make it exceed 30 billion dollars in valuation if it were to go public.
As for Jack Ma, this exit from Ant Group will sign his last notorious initiative in his withdrawal from media life. Thanks to this, the businessman seems to be able to enjoy greater freedom, while at the same time of the announcement of his potential departure, we learned that he had started a trip to Europe. It had been two years since he had set foot so long outside Chinese territory. His visit has already been an opportunity to visit Austria and the Netherlands, and meet academics to talk about ecology and sustainable agriculture.