July 19, 2024

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Alibaba’s reversal from online superstar is so serious that it briefly lost its crown as China’s second-most valuable e-commerce player

2 min read

Alibaba briefly lost its position as China’s most valuable e-commerce firm to eight-year-old upstart PDD on Thursday, a watershed moment for an internet industry that Jack Ma’s iconic firm dominated for more than a decade.

Alibaba slid as much as 1.4% during intraday trading in Hong Kong, putting its market value at about HK$1.46 trillion ($187 billion) at one point, below US-listed PDD’s $188.3 billion, according to Bloomberg calculations. Alibaba rallied later in the Hong Kong day to close up about 0.1%, leaving it with a slightly higher valuation than PDD’s overnight market capitalization. 

PDD, the company best known for hit US shopping app Temu and domestic bargains trailblazer Pinduoduo, rose 4% in US trading on Thursday. Alibaba’s American depositary receipts gained 0.3%.

The once-inconceivable shift reflects the turmoil that engulfed Alibaba after Beijing in 2020 targeted the company and its once-outspoken co-founder, kicking off a sweeping crackdown on the powerful tech sector. It also signals the rise of a generation of upstarts from PDD to ByteDance Ltd., which are disrupting the traditional arenas of social media and e-commerce.

On Wednesday, Alibaba’s billionaire co-founder Ma stunned employees when he took to an internal forum both to praise PDD and exhort his company’s 220,000-plus staff to “correct course” and retake the momentum. To many observers, his call to arms — after three years of largely staying in the background — underscored the gravity of the situation.

“On hindsight, you can say that Alibaba was resting on its laurels given they had so much of a headstart but they didn’t execute or innovate as fast,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “When anti-monopoly came up and they couldn’t use their size to compel merchants to their platforms, they were suddenly caught flat-footed.”

Alibaba, once China’s best candidate to become a trillion-dollar company, is…

Charlotte Yang, Jane Zhang, Bloomberg

2023-11-30 19:43:22

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