PDD Overtakes Alibaba as Top Chinese E-Commerce Firm

A Changing of the Guard

In a remarkable change of guard, Chinese e-commerce upstart PDD has surpassed longtime industry leader Alibaba in market valuation.

PDD, the parent company of the fast-growing Temu marketplace, reached a market cap of nearly $185 billion compared to Alibaba's $184 billion.

The milestone came just one day after Alibaba co-founder Jack Ma made complimentary remarks about PDD in an internal company forum.

Jack Ma's Praise

Ma called on Alibaba employees to learn from PDD's strategic decisions and reform mindset amid a difficult period for the e-commerce pioneer.

Alibaba has struggled under tighter regulation and slowing growth since Ma publicly criticized Chinese officials in 2020.

The company's share price has plunged 75% from its peak, including an 18% decline this year.

Meanwhile, PDD stock has rallied 70% year-to-date due to strong financial results and overseas expansion.

Temu, PDD's US-focused platform, has proven especially popular thanks to rock-bottom prices during high inflation.

The change in fortunes illustrates increased competition in Chinese e-commerce, once dominated by Alibaba and JD.com.

The Path That Paid Off

Experts say PDD's social-focused model and small-town consumer base helped it avoid regulatory scrutiny while nimbler firms ate into established players' market share.

But Alibaba remains an e-commerce titan despite its troubles. Ma's comments urging internal reform suggest the company won't concede its top position without a fight.

Still, PDD's meteoric rise from upstart to the highest-valued Chinese online retailer marks a dramatic shift in the sector's landscape.