How an Online Scandal Put Jack Ma’s Media World in the Spotlight

In the Spring of 2020, a scandal involving a top Alibaba Group Holding Ltd. executive enthralled China’s netizens. The wife of Jiang Fan, then the youngest partner at the e-commerce giant, had taken to the Twitter-like Weibo to warn another woman, a model and prominent social media influencer, not to “mess” with her husband.

The post ignited a frenzy of online speculation, with thousands of Weibo users questioning whether Jiang and the internet star were having an affair, and if that swayed Alibaba’s business decisions or investments. The episode was morphing into a public relations debacle for the firm. Then, traffic about the favored Jack Ma lieutenant and contender for Alibaba’s top job started disappearing.

Weibo deleted posts, shut down comments and took down trending search topics, according to an article published by the online arm of People’s Daily, the Communist Party mouthpiece. Far from stemming the online hubbub, this put public focus on Weibo’s relationship with Alibaba—a major shareholder—and further fanned interest in the topic, the commentary from the platform’s center for monitoring public opinion noted.

It’s unclear what drove Weibo’s actions and there’s no evidence Jiang or Alibaba influenced its decisions, though they sparked an uproar online. China’s internet watchdog penalized the microblogging site soon after for interfering with the spread of opinions related to a person with the surname Jiang, without identifying them further.

The scale and speed with which the website removed posts rankled government officials, who saw it as crossing a line, a person familiar with the matter said, asking not to be identified discussing sensitive topics. The episode drew the attention of authorities not just to Weibo, but also to the influence its most powerful backer, Ma, and his companies had in the media, the person said.

Censorship in China is directed by Party apparatchiks on issues considered to be sensitive and of national importance, but here it was employed in a seemingly trivial private conflict.

“It was unprecedented and scary how fast the posts were deleted,” wrote Chinese commentator Song Qinghui, who contributes editorials to publications including state-backed media. “The country must pay attention to and crack down on this, because the power of capital can be used by us but also the enemy.”

Ma is revered as China’s most-successful entrepreneur for building Alibaba and financial technology company Ant Group Co. into behemoths that have penetrated practically every corner of daily life, from shopping to food delivery to buying a home. Less visible till the Jiang episode was the influence he and his companies could conceivably wield through holdings in media companies amassed over the years.

The portfolio spans investments in broadsheet newspapers, BuzzFeed-style online outlets, Twitter-like social platforms and TV production companies—a constellation that informs and entertains about a billion consumers.

Major Investments in Jack Ma’s Portfolio

Percentage of shares owned by Jack Ma or his companies

<10

10-50

51-99

100%

Unknown

Hover on the dots to get more info

Percentage of shares owned

by Jack Ma or his companies

<10

10-50

51-99

100%

Unknown

Alibaba continues to expand its offline retail footprint, with more than 80% stake in Sun Art Retail Group and 18% in Lianhua Supermarket

Alibaba owns 30% of Weibo, one of China's biggest social media platforms

YTO Express

Singapore Post

Beijing Media Corp

ZTO Express

Business Review

Best

Momo

Lyft

Mango Excellent Media

SAIC Mobility

Focus Media

PingWest

Yicai Media

Intime Retail Group

Mail.Ru Group

Investment flows

into various industries

Easyhome

Alibaba owns 100% of the South China Morning Post

Groupon

Farfetch

Lazada

Nice Tuan

Alibaba

Dana

AutoNavi

Alibaba owns about one-third of Ant Group

Taobao

Truemoney

Alibaba Health

Kakao Pay

CICC

bKash

Alibaba owns 100% of Youku, the YouTube of China

Huatai Securities

XPeng

GCash

Alipay

Ant

Group

China Tower Corp

WorldFirst

Zuoyebang

36Kr

Haier Electronics

Yunfeng

Capital

Jack Ma’s

personal

investment

Ant has heavily invested in e-wallet companies globally, including Paytm, one of the most valuable Indian startups

Huxiu

Caixin

Alibaba Pictures Group

Zomato

Beijing Enlight Media

Bilibili

CMC Inc

Horizon Robotics

Evergrande New Energy Vehicle

Full Truck Alliance

Co-founded by Jack Ma, private equity firm Yunfeng Capital specializes in multiple sectors including technology, consumer products and health care

CITIC Securities

Rong360

Alibaba and Jack Ma both invested in Huayi Brothers, a film and television production company in China

Xiaozhu

Wasu

Media

Alibaba continues to expand its offline retail footprint, with more than 80% stake in Sun Art Retail Group and 18% in Lianhua Supermarket

Alibaba owns 30% of Weibo, one of China's biggest social media platforms

Investment flows

into various industries

Alibaba owns 100% of the South China Morning Post

Lazada

Alibaba

Alibaba owns about one-third of Ant Group

Taobao

Alibaba owns 100% of Youku, the YouTube of China

Alipay

Ant

Group

Yunfeng

Capital

Jack Ma’s

personal

investment

Ant has heavily invested in e-wallet companies globally, including Paytm, one of the most valuable Indian startups

Alibaba and Jack Ma both invested in Huayi Brothers, a film and television production company in China

Co-founded by Jack Ma, private equity firm Yunfeng Capital specializes in multiple sectors including technology, consumer products and health care

Alibaba and Jack Ma both invested in Huayi Brothers, a film and television production company in China

Wasu

Media

Personal

investment

Jack Ma

Logistics &

Transport

Lyft

Singapore

Post

Taobao

Entertainment

Alibaba owns 100% of Youku, the YouTube of China

Alibaba

Others

E-Commerce

& Retail

Alibaba owns 30% of Weibo, one of China's biggest social media platforms

Groupon

Farfetch

Alibaba continues to expand its offline retail footprint, with more than 80% stake in Sun Art Retail Group and 18% in Lianhua Supermarket

Yicai

News &

Media

Alibaba owns about one-third of Ant Group

Alibaba owns 100% of the South China Morning Post

News

36Kr

Digital Payments

Alipay

Caixin

Food delivery

WorldFirst

Ant

Group

Ant has heavily invested in e-wallet companies globally, including Paytm, one of the most valuable Indian startups

Xiaozhu

Co-founded by Jack Ma, private equity firm Yunfeng Capital specializes in multiple sectors including technology, consumer products and health care

Yunfeng

Capital

CITIC Securities

Sources: Data compiled by Bloomberg

“The private press holdings were the beginnings of an empire that could have overshadowed the party and the state’s media,” said Richard McGregor, a senior fellow at the Lowy Institute and author of “The Party: The Secret World of China’s Communist Ruler.” “The fact that Ma is also effectively a media magnate, on top of his financial holdings, makes his growing power even more sensitive within the system.”

Ma’s fortunes have waned since he infamously rebuked “pawn shop” Chinese lenders, regulators who don’t get the internet, and the “old men” of the global banking community at a Shanghai conference in October. Seen as an effort to deflect scrutiny of his empire, it set in motion an unprecedented regulatory offensive telegraphed by the suspension of Ant’s $35 billion initial public offering and the opening of an anti-monopoly probe into Alibaba.

Alibaba’s investments are focused on driving commercial synergies with its e-commerce and digital entertainment businesses, a spokesperson for the firm said by email. “There is no evidence to support any speculation or suggestion that these investments are the cause of the recent antitrust probe.” Ant declined to comment through a spokesman.

Media Landscape

Weibo reiterated a statement it made in June, when it was disciplined by the cyber authority, saying it would strictly follow government guidance and improve its control over information that violates regulations, “maintain the order of online communications and establish a healthy environment for Weibo community.”

Of the media and entertainment companies that Ma, Alibaba and Ant have interests in, Weibo is among the most prominent with its 500 million-plus monthly users. Alibaba’s 30% stake as of April last year made it the platform’s biggest shareholder after Weibo’s parent Sina Corp.

In 2015, Alibaba bought out the South China Morning Post, Hong Kong’s largest local English newspaper; and took a 30% stake in mainland news provider Yicai Media Group. Ant followed with an undisclosed investment in China’s most influential business magazine publisher Caixin Media Co. There’s also Alibaba Pictures, which the e-commerce giant has half of, that’s backed Hollywood blockbusters like Mission: Impossible - Fallout, and Star Trek Beyond.

Beyond these are minority investments in about a dozen other operations.

A special license is needed in China to generate original news content, making the holdings in Caixin and Yicai more valuable, according to Fang Kecheng, a professor at the Chinese University of Hong Kong, whose research focuses on journalism, digital media and political communication. Social media platforms such as Weibo are considered aggregators.

“Alibaba does not intervene or get involved in the companies’ day-to-day operations or editorial decisions,” according to its spokesperson, adding that the firm is a passive minority investor in most of the companies.

Ma isn’t the only Chinese tycoon with a foot in media and other billionaires’ holdings may be more influential in pockets. Entertainment heavyweight Tencent Holdings Ltd. runs instant messaging app WeChat—boasting more than a billion users—and its own news portal; while TikTok owner ByteDance Ltd. controls Jinri Toutiao, one of China’s most popular news and content platforms, and search engine operator Baidu Inc holds a stake in Q&A website Zhihu.

Their collective influence is dwarfed by a state-controlled complex that includes the country’s biggest television stations and news publications, as well as a pervasive system of censorship policing all media.

Under President Xi Jinping, the government has exerted greater control on the information disseminated online via Weibo, WeChat and other platforms. They all face regular crackdowns and delete posts deemed sensitive or critical of the Party.

Streaming sites operated by Alibaba and Tencent are also under scrutiny. Imperial dramas deemed to promote extravagance and treachery by depicting the lives of back-stabbing concubines have even been curbed.

Public Opinion

The supervision has prompted China’s largest online media operators to employ thousands of people to scour and scrub their platforms of content potentially offensive to the government across continents, guided by lists of sensitive keywords or Party diktats.

China spends about 1.24 trillion yuan ($192 billion) a year on surveillance, security, police, censorship tools, and other forms of domestic security, according to a 2018 estimate by The Jamestown Foundation.

The web of control hasn’t eased anxiety about non-state influence. Zhou Xiaochuan, a former governor of the Chinese central bank, in 2019 warned regulators to prepare a “war for public opinion” when stepping up oversight of fintech. Without naming specific companies, Xu Lin, minister of China’s State Council Information Office, told participants at a forum in November that his country will “tighten up control over media” and “avoid the risk of capital manipulating public views.”

Weibo Penalties

Meanwhile, Jiang apologized internally for the damage that was done by his family member’s Weibo comments and online rumors, Caixin reported. He urged Alibaba to launch a probe, which would end with his demotion and removal from a partnership of 38 people who influence the company’s board make-up.

The investigation into allegations of improper behavior concluded though that there had been no transfer of interests between Jiang and the influencer or her company.

It wasn’t long before the Weibo brouhaha caught the regulator’s attention as well.

The Cyberspace Administration of China in June ordered the microblogging site to immediately rectify “interference with the order of online dissemination in the Jiang’s public opinion incident and the dissemination of information that violates laws and regulations.” The watchdog didn’t specify what exactly was irksome about the affair but penalized Weibo by freezing its list of hot topics for one week—the same snapshot of trending issues that had abruptly stopped featuring Jiang. It asked Weibo to take to task those responsible, according to the notice.

The authority didn’t respond to a request for comment.

In hindsight, this was just the beginnings of trouble.

Over the past few months, China’s regulators have aligned to rein in the power that Ma and other technology moguls wield over commerce, data and fintech in Asia’s largest economy. Ant and Alibaba have been at the center of the clampdown, with the scuttled IPO, and a barrage of new rules targeting online lending, as well as monopolies in e-commerce and e-payments.

Ma dropped from public view following his Shanghai criticism of regulators, reemerging in January with a starkly different address to rural teachers at a charity event. The somber speech focused on philanthropic issues such as income disparities and reviving the countryside—both priorities for the Party.

The tycoon’s appearance was greeted with a $58 billion rally in Alibaba’s stock as investors judged it a signal that the worst-case scenarios for Ma and his companies were probably off the table. Its shares have slipped again since.

State Control

Local media enthusiastically covered Ma’s speech and a clip of the former English teacher touring a primary school in his hometown of Hangzhou. An online news outlet backed by the Zhejiang provincial government was among the first to write about his reappearance. Others including state-backed tabloid Global Times, Yicai and several Chinese portals followed, posting snippets of his talk or writing their own stories.

Prior to that, news of China’s favorite entrepreneur and the intensifying scrutiny from regulators had been closely guarded.

Huxiu, an online publication backed by Ant, said it would halt services for a month in December after the outlet published an editorial pointing out the risks of anti-monopoly crackdowns. The article was deleted as, eventually, was Huxiu’s statement on the suspension. The company didn’t respond to a request for comment.

Late last year, the government issued a directive to local Chinese media not to initiate reporting, analysis or opinion pieces on Ma and antitrust topics, instructing them to only cite stories from state-owned media outlets, people familiar with the matter have said.

It’s a far cry from the days when Alibaba and its competitors carried out mud-slinging media campaigns that captured the attention of the country’s largest portals and sometimes were brought to court.

“Alibaba and Jack Ma have always placed a great deal of attention on public opinion and the media,” said the Chinese University of Hong Kong’s Fang. “It’s unlikely that we’ll see again in the near future similar patterns of a private company being able to invest in so many media platforms”