(Bloomberg) — An internet industry once dominated by Jack Ma’s iconic Alibaba Group Holding Ltd. is now poised for a watershed moment as eight-year-old upstart PDD prepares to surpass Alibaba as China’s most valuable e-commerce firm.
Alibaba slid as much as 1.4% in Hong Kong, putting its market value at about HK$1.46 trillion ($187 billion) and on track to close below PDD Holdings Inc.’s $188.3 billion, according to Bloomberg calculations. PDD, known for the hit US shopping app Temu and domestic bargains trailblazer Pinduoduo, closed nearly 2% higher in New York on Wednesday.
This unprecedented shift reflects the turmoil that engulfed Alibaba after Beijing targeted the company in 2020, along with the rise of upstarts like PDD and ByteDance Ltd. disrupting traditional social media and e-commerce.
Alibaba’s co-founder Ma recently exhorted his company’s staff to “correct course” and regaining momentum. According to Vey-Sern Ling, managing director at Union Bancaire Privee, Alibaba failed to execute or innovate as fast as their competitors when the antitrust issue came up, leading to their current predicament.
Alibaba, once China’s best candidate to become a trillion-dollar company, is currently trading at its lowest this year, navigating internal and external turbulence amidst PDD’s surprising growth and the weakening Chinese economic recovery.
Meanwhile, PDD has captivated investors with its stunning growth and aggressive global expansion, surpassing Alibaba’s growth during the recent Singles’ Day shopping festival.
PDD’s meteoric ascent stems from the success of Temu, which has taken the e-commerce market by storm and expanded into scores of countries. In contrast, Alibaba’s international business, despite years of effort, remains overshadowed by its Chinese operations.
(Updates with second chart)
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