The triumvirate of China’s biggest tech giants has long been known by the acronym BAT, short for Baidu, Alibaba, and Tencent. Together, they’ve dominated search, e-commerce, and social media, respectively, helping them become the most valuable listed Chinese companies. But now, it’s more accurate to refer to China’s top tech firms as ATM.
On May 20, one of China’s newer tech giants, Hong Kong-listed food delivery firm Meituan Dianping, saw its market cap edge above Baidu’s, according to Factset and Ychart data. It’s now managed to hold on to that perch for a month, although the gap between them isn’t large, with Nasdaq-listed Baidu’s market cap at around $41 billion at the close of trading in the US last week, while Meituan is at around $47 billion today. Meituan counts some 400 million users of its food delivery and other services in China.
Alibaba and Tencent remain in a different league, valuation-wise, with market caps each above $400 billion.
It’s not surprising, perhaps, that Baidu is struggling to retain its place in the top three. It has had a hard time recovering from the hits to its reputation over medical advertising. Users boycotted it in 2016 when a cancer patient died after spending thousands of dollars on a treatment advertised by a hospital on the search engine. The search engine’s results didn’t rank information that explained the treatment was experimental as highly as the paid result, and the college student detailed his experience online before his death.
The company also hasn’t been as adept developing services for the mobile age as Alibaba and Tencent. Baidu’s revenues remain reliant on advertising, and it continues to face regulatory scrutiny over its ads, while its self-driving projects are far from yielding profits. That said, Meituan’s food delivery app has had its own struggles, fighting a war of attrition with Alibaba.
The dust has not settled, of course.
China tech watchers have long said that TMD will rival BAT. “M” stands for Meituan, which went public last year. “T” is for news app Toutaio, whose parent company is Bytedance, the world’s most valuable startup (and owner of the hit video-sharing app TikTok). “D” is for ride-hailing giant Didi. But before this new trio can mount a challenge to the old guard, Bytedance and Didi have to go public.
Jason Karaian and Jane Li contributed to this post.