E-commerce giant Alibaba faced a turning point in 2020 when its founder, Jack Ma, publicly criticized Chinese regulators. He disappeared from the public eye soon after that, and his company’s stock took a nosedive.
By 2023, PDD Holdings (owner of Temu) surpassed Alibaba’s nearly $185 billion market cap. Neil Rozenbaum from The Motley Fool believes the company’s stock could double in 2024:
2020: Alibaba’s decline begins
Alibaba’s stock lost more than three quarters of its value over the past three years. In October 2020, Ma received backlash when he claimed Chinese banks were “operating with a ‘pawnshop’ mentality.”
This led to a crackdown on tech firms in China, and Ma subsequently laid low for more than two years. He was spotted in Bangkok and Hong Kong in January 2023 before returning to his hometown of Hangzhou in March.
Business Insider reported earlier this year that Alibaba’s stock price was down 70% from the company’s peak in 2020. In addition, Ma’s net worth was $30 billion at the time – half of what he was worth in 2020, according to Bloomberg’s Billionaires Index.
Competition from PDD
The loss in market value led to PDD overtaking Alibaba. Barron’s reported that PDD’s “sensationalist third-quarter earnings blew away its rivals and pushed [PDD’s] market capitalization to $195.5 billion, easily surpassing Alibaba’s $182.6 billion.”
Earlier this month, Ma praised PDD’s success. Sharing an update on Alibaba’s internal forum (as seen by the Financial Times), Ma says: “I believe that Alibaba employees are always watching and listening.”
His written reply was in response to an Alibaba employee who remarked on PDD Holdings’ third-quarter financial results.
Strategic shifts and internal reforms
As reported by Bloomberg, Alibaba lost one of its key players recently – chief commercial officer Cai Yinghua. No indication had been given as to why he left the company, but his departure coincides with Alibaba’s internal reshuffle.
That said, Alibaba continues to expand into European countries. According to the South China Morning Post, EU sales reached a total of €32 billion ($35 billion) in 2022 – a 33% increase since 2019.
This growth contributed nearly €60 billion ($66 billion) to the GDP of Germany, France, Italy, and Spain over the past four years. It also created 172,600 jobs in 2022. One of its e-commerce platforms, AliExpress, will continue to expand in Europe and South Korea.
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About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
