Tencent takes over top slot in Asia

Sharp fall in market value of Alibaba helps Internet firm gain an edge in wealth stakes

E-commerce giant Alibaba Group Holding Ltd has conceded the top slot in the Asian Internet market to rival Tencent Holdings Ltd after a slump in share prices sliced nearly $140.7 billion off its market value in the last 10 months.

The New York-listed Alibaba saw its market value fall below $153 billion after its shares closed at $60.91 on Tuesday, compared with $162 billion as of Wednesday for Tencent.

Jack Ma, founder and chairman of Alibaba Group, at the New York Stock Exchange on Sept 9, 2014. Alibaba was listed that day at the NYSE. The company saw its market value fall below $153 billion after its shares closed at $60.91 on Tuesday. Wang Lei / Xinhua

Jack Ma, founder and chairman of the Hangzhou-based company, however, allayed fears over the fall in market value and said it was "meaningless to care about share prices".

"Can jumping off a building boost share prices? No. So why don't we focus on the real business," he said on Tuesday at a conference in Xiamen, Fujian province.

Ma said rather than focusing on shareholders, the company should focus on taking good care of customers and employees. "Share prices will automatically rise once we achieve this," he said.

Alibaba, which generates more than 80 percent of its revenue from online shopping, has fallen below its IPO price of $68 for six trading days in a row since Aug 24.

The plunging share prices have also eroded Ma's personal wealth.

Ma, who holds 7.8 percent of Alibaba, has seen his personal wealth reduce by $1.4 billion compared with August 21.

Analysts said the hit taken by Alibaba in New York is more a reflection of the general challenge faced by firms in China, rather than a unique situation faced by the e-commerce company alone.

Tian Hou, an analyst with Beijing-based TH Capital, said most of the US-listed firms have fared badly due to the renminbi depreciation.

"The slowdown in China's economy has worried Wall Street investors. The key manufacturing gauge, PMI, reading of 47.1 in August is the lowest since March 2009, almost close to the recession level. All of these have affected investor confidence on Chinese firms," she said.

The United States-listed companies from online search giant Baidu Inc to e-commerce players such as Alibaba and JD.com Inc have all announced plans to spend billions of dollars to repurchase their own shares in order to restore investor confidence.

However, as the dominant player in China's 2.8 trillion yuan ($439 billion) online retail market, Alibaba is expected to be the worst hit by the economic slowdown, said Lu Zhenwang, chief executive officer of Wanqing Consultancy in Shanghai.

"If there is no substantial increase in income, it would be very difficult for people to spend more online," he said.

Alibaba's report for the quarter ended June 30 has already shown signs of slowdown.

It showed that the company's total revenue reached $3.27 billion, up 28 percent year-on-year, which was much slower compared with the around 60 percent year-on-year growth in previous years.

"No Internet company can be a champion for two to five years. It's a tough business. Good thing is we have so many smart people. Bad thing is we have so many smart people competing with us," said Ma at the annual meeting of the New Champions 2015 of Summer Davos on Wednesday.

Shan Juan and Dai Tian in Dalian contributed to this story.

mengjing@chinadaily.com.cn