Is Alibaba’s Music Streaming Platform Xiami Shutting Down?

On Nov.29, a post on Sina Weibo, Chinese largest microblogging platform, claimed that Alibaba’s music streaming platform Xiami Music(虾米音乐) is going to close down permanently in January 2021. The author was reportedly Universal Music Marketing Director Xiang Zheng and the post went viral in a few hours with official accounts retweeting it.

“Guokefangdadeng 果壳放大灯”, a Weibo tabloid news account then reposted the news adding further details, saying that Xiami’s marketing directors are meeting in Beijing to discuss the closure and an announcement will be made after they head back to Hangzhou, where Xiami’s head office is located. 

With 14.4 million monthly active users, Xiami Music is one of the most popular music streaming platforms in China. It was acquired by Alibaba Group in 2013 and thanks to their backing the company spent 30 million yuan purchasing Voice of China 3’s copyright the following year in an effort to win over the public’s attention. Though it remains the smallest among China’s top five music streaming platforms – behind QQ Music, KuGou Music, KuWo, and NetEase Cloud Music – Xiami is famous for its classic music choice and delicate user interaction design.

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Xiami’s niche branding has proved to be a weakness, and the company has been suffering losses since 2018 when it had merely 30 million active users – one-tenth of their competitor Kugou. According to a 2016 iResearch’s report on the Chinese online music industry, Tencent Music owns over 90% of the world music library’s copyright, while Xiami Music only has 20%. The company’s founder Wang Hao said in an interview that Xiami’s annual copyright fees are ten times the revenue scale.

The company seems to be no longer the apple of Alibaba’s eye. Last September, Alibaba Group’s founder Jack Ma invested approximately $700 million in Xiami’s competitor, NetEase Cloud Music, as part of its latest funding round. 

This abnormal operation led to rumors about a possible closure, upsetting plenty of users, with one Sina Weibo blogger named Wensisisi commenting: “I have been using Xiami for years and I’d never thought it would close down one day. I love the recommendation feature on Xiami as it will refresh my morning with interesting songs. Please do not close Xiami! My heart is broken.”

While closure rumors keep simmering, Xiami’s management has yet to make an official announcement.