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"Due to operational adjustments, we will stop
the service of Xiami Music," the online music arm of the Chinese
e-commerce giant said on Tuesday on its Weibo account, adding
that the closure will occur on Feb. 5.
"It's hard to say goodbye after being with you for 12 years."
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 Holdings. Its efforts however have
not paid off and the app currently only has 2% of China's music
streaming market, behind KuGou Music, QQ Music, KuWo, and
NetEase Cloud Music, according to Beijing-headquartered data
intelligence company TalkingData.
Xiami's closure also comes after Chinese regulators announced
that they had launched an antitrust investigation into Alibaba,
which beyond its core e-commerce business also operates in
sectors such as financial services, cloud computing and
artificial intelligence.
However, it does not mark the end to Alibaba’s participation in
the online streaming market. In September 2019, Alibaba invested
$700 million in one of Xiami's competitors, NetEase Cloud Music.
(Reporting by Sophie Yu in Beijing and Brenda Goh in Shanghai;
Editing by Michael Perry)
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