- Premium Content It takes our newsroom weeks - if not months - to investigate and produce stories for our premium content. You can’t find them anywhere else.
Doris Yu · · 9 min readRecap 2020: A year of roadblocks for Chinese tech startups
China was the first country to be hit by Covid-19 and also the first to recover from it.
As students were forced to stay at home due to a national lockdown, the online teaching and learning sector gained more attention, boosting the edtech sector in China as a whole. In 2020, the industry is estimated to reach 453.8 billion yuan (US$66.6 billion), a 12.3% increase from the previous year.
Photo credit: Evgeny Gromov / 123RF
Online grocery is another space that has grown rapidly. Chinese tech giants, including Alibaba, Tencent, and JD.com, have established a presence in the industry. In November, Alibaba co-led a US$196 million series C3 round in community ecommerce platform Nice Tuan, while JD.com just announced it would invest US$700 million in community group-buying firm Xingsheng.
Though China’s tech sector appears to have recovered quickly, political forces have stood in its way in 2020. Here are some of the key developments that Tech in Asia has tracked.
Ant still left dreaming of its IPO
Ant Group, the fintech unit of Alibaba, was notified of the suspension of its IPO in the Nasdaq-like Shanghai Stock Exchange less than 48 hours before its anticipated listing. Consequently, the fintech firm shelved its plans for its listing on the Hong Kong stock exchange as well.
Source: 123RF
The dual listing, which was expected to be the world’s largest IPO at US$35 billion, was suspended due to Chinese draft rules that aim to prevent monopolistic behavior by internet platforms.
The new rules may increase scrutiny on ecommerce platforms such as Alibaba’s Taobao, JD.com, and Pinduoduo, online payment platforms like Ant Group and Tencent’s WeChat Pay, as well as food delivery platform Meituan.
See also: With regulations sharply rising, Ant Group’s Asia investees are more important than ever
According to a report by Bloomberg that cites regulatory officials familiar with the matter, Ant Group is in its early stages to review the changes it has to make in order to comply with the new proposed guidelines, and it may not be able to complete the listing before 2022.
The company is not the only victim of the new rules. In December, China’s antitrust watchdog fined Alibaba, Tencent-backed China Literature, and Shenzhen Hive Box 500,000 yuan (US$76,000) each for failing to report their past acquisition deals for antitrust reviews.
Most recently, a securities watchdog official proposed that the government should consider imposing a digital data tax on tech companies. “Some third-party platform-like enterprises hold a large amount of users’ data, just like holding precious mineral mines,” said Yao Qian, science and technology supervision bureau chief at the China Securities Regulatory Commission.
Chinese tech startups face the heat with accusations that they’re faking it
Embattled ByteDance
The pandemic push for edtech
Stay ahead in Asia’s tech landscape
This is premium content. Subscribe to read the full story.
This year, Chinese tech giants were embroiled in widening supervision at home and abroad, while some sectors became the “winners” during the pandemic year.
We know this is not ideal. ⌛ Sign up in 20 seconds. Cancel anytime.
Our subscriber community includes professionals from these companies:
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
