- The value of Chinese tech giant Tencent has plummeted to the value of a local Chinese liquor giant.
- Kweichow Moutai overtook what was once China’s most valuable company in September.
- This is yet another sign of Tencent’s loss of dominance and the result of restrictions on the tech industry.
- For more stories, visit Business Insider.
Tencent’s nearly six-year reign as China’s most valued company may be over.
Once worth nearly $1 trillion, the gaming and internet giant is now worth less than half of its peak market value. On September 30, Tencent lost its status as China’s most valuable company when its market capitalization fell below that of Guizhou-based distiller Kweichow Moutai.
That means its value has gone from $950 billion in January 2021 to around $325 billion in less than 22 months, per Bloomberg.
On Tuesday afternoon, Tencent regained a slight lead over Kweichow Moutai, with a market capitalization of $302.5 billion to Kweichow Moutai’s $300.1 billion, according to Bloomberg data.
Kweichow Moutai is a household name in China. His signature Moutai Baijiu is a fiery 53% alcohol liquor that is commonly consumed at business dinners. The drink was famously served to Richard Nixon during his historic trip to China in 1972.
The distiller’s profits jumped 19.1% in the past nine months, which analyst group Yicai Global attributed to higher sales at the distiller’s brick-and-mortar stores and the success of its new online retail platform. line, iMoutai.
Tencent did not immediately respond to Insider’s request for comment.
Severe restrictions on tech giants spelled the end of Tencent’s glory days
This market value of Kweichou Moutai could even be compared to that of Tencent shows how far the tech giant has fallen.
Tencent’s star status was thought to have been cemented in the mid-2010s when its powerhouse app, WeChat, became the super app for every online service imaginable – from text messages and video calls to games, to restaurant reservations. , carpooling, food delivery and paying bills.
WeChat’s integrated payment platform, WePay, is rivaled only by Alibaba’s Alipay in a country where cashless payment is so ubiquitous that even beggars in Beijing use to ask for change by displaying QR codes on improvised panels.
Tencent’s rapid descent came less than a year after posting a market capitalization of $950 billion in January 2021, while its value rose almost twice as fast as that of Tesla, according to Bloomberg. At the time, another tech behemoth, Alibaba, saw its fortunes marred and its historic IPO plans ruined when China accused it of violating its restrictions on forming monopolies.
Beijing’s regulatory moves also came for Tencent in 2021, when the Chinese government introduced new antitrust rules between internet companies and cracked down on video games for Chinese minors.
In November, Tencent was told it would need to receive approval from regulators before releasing new apps or pushing updates to devices.
This drive to curb the rampant growth of China’s tech industry comes directly from President Xi Jinping, who has regularly promoted “common prosperity,” or the idea of redistributing China’s wealth within the nation. In August, Xi hailed his government’s efforts to halt the “barbaric growth” and “irrational expansion” of the tech sector.
The Chinese leader also showed no indication that he had changed his position. Xi urged the need for “common prosperity” during his speech at this week’s press conference of the Communist Party Congress, which opened on Sunday.
Xi is expected to secure a third term and cement his position as China’s supreme leader at the historic meeting.