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China tech regulation spells end of Alibaba dominance

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HONG KONG: Chinese tech giant Alibaba’s stock continued to tumble on Wednesday, falling 18 percent this month and wiping out all of October’s gains on concerns over possible renewed regulation of online platforms in China.

China’s State Administration for Market Regulation said over the weekend that it had fined Alibaba, Tencent, and Baidu, among other tech companies, for breaching antitrust law by failing to declare deals as far back as 2012.

The competition regulator imposed a fine of 500,000 yuan ($78,279) for each of the 43 cases listed in its investigation.

Moreover, on Monday Deutsche Bank cut its target price for Alibaba’s Hong Kong stock by almost 4 percent, citing “near-term challenges.” The bank has raised its target for JD.com by 16 percent, noting “resilient growth amid macro uncertainties.”

Ramiz Chelat, a senior portfolio manager at Vontobel Asset Management, told Bloomberg that Beijing’s tech crackdown means Alibaba will have to shift about 5 percent of its e-commerce revenue to its competitors, including JD.com and Pinduoduo.

JD.com, in line with the wider market, is up about 46 percent from its August low. The company earlier reported more than a 25 percent jump in third-quarter revenue, saying that its “growing consumer mindshare” helped drive the results.

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