Alibaba and Tencent, both are Chinese tech giants with diversified interest across different business sectors ranging from commerce to social media and gaming. Among the two, Alibaba has a market cap of $588 Billion(approx.) while Tencent boasts a $730 Billion valuation.
With the Chinese government’s crackdown on its tech giants recently regarding antitrust issues both these companies were slapped with gigantic fines – Alibaba to the tune of $2.8 Billion and Tencent with $1.5 Billion. But the corresponding effect was different.
The following are the revenue and profit/loss figures of both the companies:
|Alibaba||$28.6 Billion||$1.18 Billion(loss)||($2.8 Billion)|
|Tencent||$21 Billion||$7.4 Billion(profit)||($1.5 Billion)|
This is the first time Alibaba has reported a loss since becoming public in 2014.
The vast difference may be attributed to the following factors:
- Tencent has a significant stance on the gaming market worldwide, with its distribution of PUBG and Honor of Kings. It also owns China’s WhatsApp(WeChat). The pandemic saw an increase in the use of these two services manifolds.
- Alibaba has been in the crosshairs of the government since its failed IPO of Ant Financial(its payments arm) and JackMa’s October 2020 speech criticizing the government. Alibaba also has most of its resources in commerce, which has tight competition from other players like Pinduoduo. Its CEO attributed the loss to its $2.8 Billion fine.