Alibaba pulls plug on Xiami Music
Alibaba Group to shut down its music streaming platform Xiami Music in February 2021, due to ‘operational adjustments’
Alibaba Group is to shut down its music streaming platform Xiami Music in February 2021, stepping away slightly from the Chinese entertainment industry. The Chinese e-commerce giant's online music arm, which has been around for 12 years, will be closed due to “operational adjustments”, with the group announcing that the service will cease on February 5.
Alibaba acquired the music service in 2013, and invested millions of yuan to compete in China’s online music market, which is dominated by Tencent Music Entertainment Group. However, the investment didn't pay off, with Xiami Music only having garnered two per cent of China’s music streaming market, despite investment. In terms of market share, Xiami currently sits behind three of Tencent’s apps: KuGou Music, QQ Music and KuWo, and NetEase Cloud Music, according to Beijing-headquartered data intelligence company TalkingData.
Xiami’s closure comes after Chinese regulators announced an antitrust investigation into Alibaba last month (December 2020). The State Administration for Market Regulation said that it would probe alleged monopolistic behaviour by Alibaba and would investigate the company's practice of requiring merchants to sign agreements that prevent them selling products on other rival platforms, a practice known as “choosing one from two”. In response, Alibaba said it will “actively cooperate with the regulators on the investigation”.
Even with the closing of Xiami, Alibaba still has a presence in the online streaming market, due to its investment of $700m (£516m, €570m) in one of Xiami’s competitors, NetEase Cloud Music, in September 2019.
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