What the numbers say: The value of Alibaba by market capitalization over the past five years has been strongly affected by China's political situation. The company's value increased from 2016 until 2020 as it benefitted from the growing strength of China's consumer market. From the middle of 2020, its market cap dropped precipitously as Beijing began cracking down on its domestic tech giants.
Relevance: Historically the most valuable e-commerce firm in China, Alibaba remains one of the largest in the world. Its performance over the past five years serves as a bellwether for Chinese e-commerce in general. The impact of the government crackdown in 2020 is still being felt today as the company splits into relatively independent units to avoid attracting more government scrutiny going forward.
Brands that should care: International e-commerce and tech firms interested in entering the Chinese consumer market, which is the largest in the world, should be aware of the government's attitude toward these industries. As Beijing continues to assert its dominance in Chinese society, companies will need to adapt.