According to Reuters, the move is part of a drive to increase scrutiny over Chinese companies during rising tensions between Taipei and Beijing, as Taiwan, claimed by China as its sovereign territory, has long been cautious of Chinese investments on the island. For instance, in August 2020, it barred local sales for Chinese TV streaming services operated by the likes of iQiyi and Tencent Holdings.
Therefore, Taiwan reported in August 2020 that Claddagh Venture Investment, which runs Taobao Taiwan, was in fact controlled by China’s Alibaba Group and gave the company six months to disinvest or re-register as Chinese-backed rather than foreign, or leave the island. Claddagh reported afterwards that Taobao Taiwan did not come under Alibaba and was a different company from Alibaba’s Taobao China.
However, Claddagh had to shut the ecommerce site due to 'multiple uncertainties in the market'. Consequently, the Taiwan operation will be closed by the end of 2020, although merchants will receive help in delivering existing orders to buyers.
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