Aug 21, 2019 10:00 AM

Baidu Moving Out, Bytedance and Ant Marching in to Most Valuable Tech Firm Leader Board

This week’s Tech Talk is all about numbers, specifically the figures that show who gets bragging rights as China’s biggest high-tech names. That issue was at the forefront last week when sputtering search engine Baidu briefly slipped off the leader board of China’s top five tech firms after years in the No. 3 spot behind the much larger Tencent and Alibaba.

Baidu’s slide from grace actually began earlier this year when it fell out of the top three, leading many to call an end to the “BAT” era of Baidu, Alibaba and Tencent. It was replaced by Meituan Dianping, the money-losing up-and-comer that has built a name as China’s leading provider of online-to-offline (O2O) services like internet-based takeout dining.

From there it seems like the ground suddenly began to give out under Baidu’s feet, and the company was passed by two names that weren’t even top of their class. The first was, the e-commerce firm that’s a perennial second fiddle to Alibaba. The second was internet stalwart NetEase, a distant second in online games to Tencent, which briefly passed Baidu to take the No. 5 slot.

All of that got me thinking about the state of China’s high tech realm, and how it’s suddenly in a state of flux after a relatively long period of stability. The changes are no doubt being driven by technology, including location-based technologies that power many of Meituan’s services, and drones that may become the vehicle of choice for product delivery by names like in the future.

That got me to thinking what the landscape might look like five years from now in terms of who’s-who at the top of China’s high-tech heap. To answer that question I polled a few of my contacts who are veterans in this realm and have a relatively clear view on who is coming and going. I was hoping one or two might predict a sudden fall for Alibaba or Tencent, as everyone likes a story with some good drama.

But not surprisingly, all predicted that pair would stay entrenched at the top of China’s high-tech food chain for at least the next five years. The reason is simple enough: The pair are light years ahead of their closest rivals in terms of size, at least eight times larger than their next closest rival, to be exact.

Alibaba was at the top of the leader board at the start of this week with a value of $464 billion, compared to Tencent’s $412 billion. The pair have actually see-sawed back and forth quite a bit in the No. 1 and No. 2 positions these past two or three years, depending on the mood of investors. Right now Tencent is in the doghouse due to weakness in its gaming business after a regulatory freeze on approval of new titles for much of last year.

After that pair, the latest leader board had Meituan Dianping at No. 3 at $51 billion; No. 4 at $46 billion; and Baidu back at No. 5 at $36 billion, just ahead of NetEase.

Bye-bye Baidu

Looking into the crystal ball, people were split on whether Baidu would still be in the top five in 2024. A few thought the company could reinvent itself by focusing on autonomous driving powered by artificial intelligence. I personally fall into the other camp that sees this company on a longer downward decline that could very well end with its sale to a larger rival.

Baidu founder Robin Li has been at the top of the China search pile for more than a decade now, and is almost certainly growing bored with that particular business due to his famously short attention span. What’s more, the search business itself has become a bit of an albatross for the company due to its constant appearance in negative headlines for being too self-promotional and blurring the line between paid and organic content.

So who could possibly buy out a giant like Baidu? That brings us to Bytedance, the lone company that was on everyone’s list as a shoe-in for inclusion in the 2024 China tech top five. For anyone unfamiliar with this company, it’s the owner of several wildly popular media apps, led by short video app TikTok, known in Chinese as Douyin. It was reportedly worth $75 billion at the time of its most recent fundraising last October, though I would take that figure with a grain of salt.

After Bytedance, the other two names that came up as potential top five contenders were Ant Financial, the financial services affiliate of Alibaba and owner of the popular Alipay electronic payment service; and Didi Chuxing, the private car services giant that fought a bloody war with Uber in China several years back before ultimately merging with Uber’s China business.

Ant is a hard company to gage due to its presence in the financial technology (fintech) space, which seems to undergo new crackdowns regularly by Beijing regulators worried about financial risk. The company was reportedly worth $150 billion at the time of its most recent funding last year, though again that number should probably be taken with a grain of salt.

Didi is probably a bit of a dark horse in all this due to its limited growth potential. The company was valued at about $50 billion based on documents released by Uber at the time of its IPO earlier this year, down from $56 billion at the time of Didi’s last fundraising at the end of 2017. At the very best we can probably assume that Didi’s value has stabilized, which would still qualify it for a top five spot now.

At the end of the day, most people, myself included do see Alibaba and Tencent as staying put in the top five, at least for the next five years. After that Ant and Bytedance look like good bets for the No. 3 and 4 positions, probably in that order. That leaves just one more space in the top five, which looks most likely to go to Meituan. Sorry, Baidu, and NetEase.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to

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