Sep 27, 2021 Last Updated 22:27 PM EDT

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Alibaba's Future Growth Uncertain After Jack Ma Caught Chinese Government's Ire?

Feb 03, 2021 04:00 AM EST

Jack Ma
(Photo : Lintao Zhang / Staff/GETTY IMAGES)

Jack Ma, Alibaba's highly controversial CEO is not in the good side of the Chinese government. This has widespread implications. 

Alibaba's Future Growth Uncertain? 

For one, this has intensified regulatory scrutiny on the e-commerce giant. For experts, this means Alibaba's future is quite uncertain. 

Alibaba has reported higher-than-expected earnings for the December-quarter. But analysts now think the earnings are not likely to be enough to secure the company's growth if the government is monitoring its every move, as reported by CNBC

It's not only Beijing that is checking the company's every move - the once enthusiastic investors are wary as well. They essentially have a bad feeling about the company's future, and naturally, the money they have with the company. 

"Investors are looking at Alibaba with a much more careful eye after having been attracted by the growth story and the founder's global profile," Rebecca Fannin, author of "Tech Titans of China," shared to CNBC through email correspondence.

"The current frictions are a new reality for investors who may not have carefully considered how the company's rise as a powerful tech titan could be a threat to the status quo," Fannin added. 

Jack Ma and Chinese Government Still Haven't Reconciled

It can be remembered that the friction started in October 2020, when Ma made some unwelcome comments about the Chinese financial regulations some days before the Ant Group went public. 

Days ahead of the initial public offering of Ant Group in Shanghai and Hong Kong, which Jack Ma founded, he slammed the Chinese government by saying, "today's financial system is the legacy of the Industrial Age. We must set up a new one for the next generation and young people. We must reform the current system." 

After the damning speech, the Chinese government started an antitrust probe into Alibaba. It also led to the suspension of its fintech arm Ant Group's US$37 billion IPO. 

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For two months, Jack Ma somehow disappeared - not being active anywhere, on television or in social media. He simply stayed low.

He didn't even appear in the final episode of his talent show which is titled as 'Africa's Business Heroes'. For months after his last October social media post, no more followed.

Apart from missing from his show, he cannot be seen in its promotional videos and web pages as well. Naturally, this caused widespread concern. He re-emerged last month with a 50-second video appearance but the fallout with the government is hardly resolved. 

At present, the Chinese state newspaper even had him removed from the list of entrepreneurial leaders. This is likely to raise some eyebrows and more concern, since Jack Ma has always been known as an enigmatic and effective entrepreneurial leader.

While he, China's best-known businessman (around the world) was not left out in the front-page article published by the Shanghai Securities News, Huawei Technologies' Ren Zhengfei, Xiaomi Corp's Lei Jun, and BYD's Wang Chuanfu were all part of the list.

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