Credits: Wikimedia Commons

Amazon has done a lot of business over the past year, thanks to COVID 19. The e-commerce market in general has been expanding at an unprecedented rate, and thus, when a player like Alibaba underperforms, it’s surprising to everyone. The Chinese e-commerce behemoth posted revenue of 187.39 billion ($28.6 billion) vs. 180.41 billion yuan estimated by Wall Street, up 64% year-over-year. And while this is very good, it registered its first loss as a public company, losing 5.47 billion yuan in the March quarter.

The company’s commerce branch has been doing as well as one would expect. It brought in a revenue of 161.36 billion yuan, a 72% year-on-year rise. Moreover, cloud business has also been doing pretty well with  revenue growing 37% year-on-year to 16.76 billion yuan.

So, even though all of Alibaba’s divisions that are supposed to be doing great are in fact outperforming expectations, why did it just lose money?

While this might seem peculiar, there’s a very nice explanation. China, in all its authoritative glory, has been clamping down on monopolistic tendencies in the country, and what’s a bigger monopoly than Alibaba?

All of this started when Jack Ma criticized the Chinese government last year, just a few months before Ant Group’s IPO. This, as one would expect, was not a very nice idea, as Chinese regulators swooped in to stop Ant’s $34.5 billion offering, leading to massive losses for both the fin tech giant and its parent company. Moreover, authorities also started an antitrust investigation into Alibaba’s working.

All of this made the Jack Ma led company radioactive, and over the past few months, about $240 billion worth of value has been eroded from the company.

Even with all of this slowing it down, the company was supposed to make 10.56 billion yuan in the quarter, far above Wall Street’s estimates. However, it was fined a massive 18.23 billion yuan ($2.8 billion) due to the antitrust investigation, which resulted in a staggering 7.66 billion yuan loss from operations.

While the Chinese e-commerce giant says that it expects to generate revenue of 930 billion yuan in its 2022 fiscal year, it’s still unknown if Chinese regulators are done with the Alibaba fiasco. With mounting scrutiny, China’s biggest company might have a tough time ahead.