The CEO of China’s Alibaba, Daniel Zhang, said earlier today that the e-commerce behemoth does not expect any material impact from the forced changes to its arrangements with merchants.
Daniel Zhang said this after regulators fined Alibaba a record $2.75 billion for abusing its market dominance.
Shares in Alibaba Group Holdings Ltd rose as much as 9% in Hong Kong trade.
This rally could be linked to the removal of a key source of uncertainty for the company.
Alibaba has come under intense scrutiny since billionaire founder Jack Ma’s public criticism of the Chinese regulatory system in October.
Zhang told an online conference for media and analysts that Alibaba will introduce measures to lower entry barriers and business costs faced by merchants on its platforms.
Alibaba executives reiterated their confidence in China’s support of the company despite Saturday’s record 18 billion yuan ($2.75 billion) fine and measures ordered by regulators.
“They are affirming our business model,” said Alibaba executive vice chairman Joe Tsai. “We feel comfortable that there’s nothing wrong with our fundamental business model as a platform company.”
Markets reacted positively, with shares jumping by the most since July last year.
Aside from imposing the fine, among the highest ever antitrust penalties globally, the State Administration for Market Regulation (SAMR) ordered Alibaba to make “thorough rectifications” to strengthen internal compliance and protect consumer rights.
SAMR said it had determined Alibaba, which is also listed in New York, had prevented its merchants from using other online e-commerce platforms since 2015.
The practice, which the SAMR has previously spelt out as illegal, violates China’s antimonopoly law by hindering the free circulation of goods and infringing on the business interests of merchants, the regulator said.
The probe comes as China bolsters SAMR with extra staff and a wider jurisdiction amid a crackdown on technology conglomerates, signalling a new era after years of laissez-faire approach.