Alibaba Group Holding Limited’s (NYSE:BABA) market value has plunged to about half that of rival Tencent Holdings Ltd (OTC:TCEHY) as it battled the double whammy of sluggish demand and brewing competition from the likes of PDD Holdings Inc (NASDAQ:PDD).
On Thursday, the Jack Ma co-founded e-commerce giant reported second-quarter FY23 revenue growth of 9% year-on-year to $30.81 billion, beating the consensus of $30.77 billion. Adjusted earnings per ADS of $2.14 beat the consensus of $2.11.
Taobao and Tmall Group revenue grew 4% Y/Y to $13.39 billion. Cloud Intelligence Group grew by 2% Y/Y to $3.79 billion.
Alibaba put the Freshippo (Hema) IPO offering on hold. Meanwhile, the additional semiconductor embargo on China by the U.S. posed uncertainties for the prospects of Cloud Intelligence Group.
Alibaba has a market capitalization of $201 billion, while Tencent, focused on social media and gaming, boasts $384 billion, Bloomberg reports.
The report cited Willer Chen of Forsyth Barr Asia Ltd, who flagged Alibaba’s challenges due to a slow consumption recovery in China, increased competition in e-commerce, and heightened regulatory concerns, all of which have negatively impacted investor sentiment.
China had penalized Alibaba a record 18 billion yuan in 2021 for antitrust violations.
In July 2023, China ended its regulatory overhaul on fintech affiliate Ant Group by imposing a penalty of 7.12 billion yuan.
Price Action: BABA shares traded lower by 3.93% at $76.00 premarket Friday.
