Alibaba Group Holding Limited BABA stock is trading lower Tuesday while rival ByteDance, the parent company of TikTok and Douyin, has shown remarkable growth in the second quarter of 2023, with a reported revenue surge of 40% to $29 billion, overshadowing its rivals.
Last week, Alibaba 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.
ByteDance’s success is partly due to its foray into online shopping through Douyin, its domestic short video app, directly competing with Alibaba’s e-commerce dominance, SCMP reports.
Alibaba, a major player in the e-commerce sector, generated around half of its total sales from its core e-commerce business. Despite its strong market position, Alibaba faces increasing competition from ByteDance, primarily as Douyin, with over 600 million daily active users, increasingly relies on e-commerce as a key revenue source.
Alibaba continues to be a heavyweight in e-commerce, but ByteDance’s diversification into various digital services, including e-commerce, is reshaping the competitive landscape.
Now, Alibaba looks to focus on an AI-driven technology businesses, and global commerce networks after it decided to halt the spin-off of its cloud unit due to U.S. export restrictions on advanced chips.
Alibaba’s rival Baidu, Inc (NASDAQ: BIDU) reported a third-quarter FY23 revenue growth of 6% year-on-year to $4.72 billion, missing the consensus of $4.79 billion.
Baidu’s adjusted earnings per ADS of $2.80 beat the consensus of $2.32.
Price Action: BABA shares traded lower by 0.43% at $78.11 premarket on the last check Tuesday.