Taobao Taiwan shuts e-commerce site as government questions Chinese ownership

Taobao Taiwan shut its e-commerce site on Thursday after the government ordered the firm to re-register as China-backed or leave the island, part of a drive to increase scrutiny over Chinese firms amid rising tensions between Taipei and Beijing.

British-registered Claddagh Venture Investment, which runs Taobao Taiwan, said it had shut the e-commerce site due to "multiple uncertainties in the market". It did not elaborate.

Claddagh said it will shut its Taiwan operation by end-2020, adding it will help merchants deliver existing orders to buyers.

"After cautious deliberations ... the company has made a painful decision to stop Claddagh's operation in Taiwan on December 31 this year," it said in a statement.

Taiwan said in August that Claddagh was in effect controlled by China's Alibaba Group Holding Ltd and gave the firm six months to disinvest or re-register as Chinese-backed rather than foreign or leave the island.

Claddagh had said Taobao Taiwan did not come under Alibaba and was a different company from Alibaba's Taobao China.

Alibaba did not immediately respond to a request for comment on Thursday.

Democratic Taiwan, claimed by China as its sovereign territory, has long been cautious of Chinese investments on the island. In August, it barred local sales for Chinese TV streaming services operated by the likes of iQiyi and Tencent Holdings.