The Chinese multinational technology company Alibaba Group will shut down its music streaming platform Xiami Music from next month, a decision that would mark a step back from its ambitions to take over the entertainment industry of the country.
“Due to operational adjustments, we will stop the service of Xiami Music,” the music streaming unit of the Chinese eCommerce giant informed through its Weibo account, adding that the platform will only be available until February 5th.
Alibaba acquired the music service in 2013 and invested millions to compete in China’s online music market, which is dominated by Tencent Holdings. Xiami was once one of China’s most popular and taste-making music streamers, but it has fallen to the wayside since the merger.
In 2016, the Chinese technology conglomerate Tencent bought a majority share in China Music Group and formed a digital music behemoth. By 2017, Tencent’s music app brought a majority of music deals and controlled 75 percent of the country’s music streaming market.
Currently, Xiami has only 2 percent of China’s music streaming market and it is behind the leading platforms like KuGou Music, QQ Music, KuWo, and NetEase Cloud Music, according to a Beijing-headquartered data intelligence company TalkingData.
The closure of Xiami is also in light of the Chinese regulators’ antitrust investigation against Alibaba’s business beyond its core eCommerce unit and at a time when the conglomerate’s co-founder Jack Ma is rumored to be missing.
However, it does not mark the end to Alibaba’s participation in the online streaming market as its copyrights-focused segment Yin Luo will continue to operate. In September, Alibaba invested $700 million in one of Xiami’s competitors, NetEase Cloud Music.