In response to regulatory pressure from the Chinese government, Alibaba and Ant Group are gradually dissolving their partnership and seeking to launch new businesses independently, sources say.
According to Reuters, people familiar with the matter said there had been a shift in the partnership between Alibaba (BABA:NYSE) and its fintech affiliate Ant Group after China's regulatory crackdown over the past period.
Industry practitioners say this is in line with the trend in China to separate financial activities from Internet operations.
The duo are gradually unbundling their business with each other to avoid any possible regulatory threat, seeking new businesses independently. In fact, the separation of the two companies' collaborative arrangements could date back to last year, sources said.
As Ant Group seeks to expand its business overseas, it has repeatedly emphasized its independence from Alibaba. Meanwhile, Alibaba is also trying to build a cross-border transaction tool that can compete with Ant Group and launched its own cross-border transaction service, Alibaba.com Pay, in April this year.
Reuters reported that Ant Group had made progress overseas, showing that it is doing well without Alibaba.
However, it will be difficult for them to achieve complete independence in a short time frame. 11 years after it was spun out, Ant was still in a tight relationship with Alibaba, which holds a 33% stake in Ant Group as of press time. In addition, there is some overlap between the two companies' senior management staff.
Chinese officials unexpectedly called off Ant Group's IPO at the end of 2020. Reuters reported, citing sources, that Ant would restart the listing process. Ant Group denied the rumor on June 9, claiming that it was currently focusing on "rectification" work and had no plans to restart the IPO.