[HONG KONG] Baidu Inc has once again lost its spot among China's five most valuable Internet companies, this time elbowed out by much younger rival Pinduoduo (PDD) Inc.
The four-year-old e-commerce startup PDD is now worth more than Baidu after its shares surged 8.7 per cent in New York on Thursday. That puts it among China's Top 5 Internet companies in market value, trailing the likes of rival JD.com Inc and food delivery service Meituan. Baidu has been pushed to sixth place.
It's not the first time that Baidu dropped from the top 5. NetEase Inc, China's second-largest gaming house, briefly overtook the local Internet search leader in market value earlier this month. Baidu's shares later recovered after it posted stronger-than-expected second-quarter results. The company has shed about US$63 billion of capitalisation since its peak in May 2018, or roughly equivalent to one Caterpillar Inc.
Once touted as a member of China's Internet triumvirate alongside Alibaba Group Holding Ltd and Tencent Holdings Ltd, Baidu is grappling with a slowdown in China's economy and is facing intensifying competition for advertising from app factory ByteDance Inc. That popular social media giant recently launched its own Google-like general search engine, posing a direct challenge to Baidu's core business.
PDD has experienced meteoric growth since its inception. The shopping app, known for cheap deals and gamified purchasing experiences, is luring new users from China's rising middle class while investing in its own logistics network - areas currently dominated by rivals Alibaba and JD.com.