China’s Big Tech firms from Tencent to Alibaba cut external investments further in 2023 amid troubled economy
- Total investment deals made by Alibaba, Tencent and Baidu plunged by nearly 40 per cent last year, data from ITJuzi shows
- Smartphone maker Xiaomi emerged as the top investor among its peers by number of investments, with 82 deals made in 2023
China’s internet giants from Alibaba Group Holding to Tencent Holdings slashed external investments last year amid an economic slowdown, regulatory headwinds and geopolitical tensions, according to data compiled by a Chinese consultancy.
Total investment deals made by Alibaba, Tencent and Baidu plunged by nearly 40 per cent to 102 in 2023, with Tencent – known for its expansive holdings in China’s internet sector – seeing the largest reduction in deals, data from ITJuzi showed.
The social media and video gaming titan struck 39 investment contracts with 37 companies last year, a sharp decline from the 95 and 299 deals it made in 2022 and 2021, respectively.
Web search and artificial intelligence (AI) firm Baidu participated in 24 investment deals last year, down from 52 in 2021. E-commerce giant Alibaba, which owns the South China Morning Post, took part in 39 deals, a fall from 91 in 2021, according to ITJuzi.
2021 was a watershed year for Chinese internet firms, as Beijing kicked off a campaign to rein in the “disorderly expansion of capital”. Amid a series of regulatory tightening moves, the country’s internet champions - whose market sizes were once on a par with their American counterparts - have virtually stopped expanding.
Tencent’s investments last year were mainly related to corporate services, healthcare and video games. Advanced manufacturing firms were Alibaba’s top picks, with eight related deals being struck by the Hangzhou-based company and its affiliates during the year.