Move over, Ali. Tracing PDD’s rise to become China’s most valuable ecommerce firm

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Hello reader,

I still recall the hype around Alibaba’s (BABA, NYSE) 2014 IPO in the US, what was then the biggest public offering ever. With many believing that Alibaba would have a dominant share of the large and fast-growing Chinese ecommerce market, its share price skyrocketed.

This proved right for the next six years, and Alibaba’s shares peaked in October 2020.

Then everything changed. That month, founder Jack Ma spoke out against what he saw as backward Chinese financial regulators, who responded by halting the IPO of Ant Financial, its affiliated fintech platform.

More travails followed, as my colleague Peter traces in this week’s premium story, which tracks how Alibaba lost its crown as China’s most valuable ecommerce company to upstart PDD Holdings (PDD, NDAQ).

While PDD has certainly played the game astutely in recent years, much of the story is also about how Alibaba played a hand in its own decline.

However, don’t count it out just yet. The company’s Tmall and Taobao brands still command a sterling reputation in China, as Peter notes.

The competition between Alibaba and PDD also holds lessons for ecommerce companies in Southeast Asia, where the markets remain in a state of flux.

— Simon

THE BIG STORY

Image credit: Timmy Loen

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