The race for online dominance in China continues to heat up as Alibaba Group Holding Ltd (NYSE:BABA) and Baidu Inc. (ADR) (NASDAQ:BIDU) try to outdo each other in one of the youngest and fastest growing landscape in the world. During an interview on Bloomberg, CLSA’s Francis Cheung, reiterated that Alibaba and Baidu remain the top picks in China online landscape despite the ongoing concerns of a slowdown in the second largest economy in the world.
“Baidu Inc. (ADR) (NASDAQ:BIDU) and Alibaba Group Holding Ltd (NYSE:BABA); this is very early phase in Chinafor the internet E-commerce only got going a couple of years ago. I think this is a very long time trend you can buy into your will need to pick your entry points, and that is good,” said Mr. Cheung
A slowdown in the Chinese economy for the second straight month has already raised expectations that the government will be prompted to initiate more stimulus measures as a way of averting a further decline. A slowing economy is not good for Alibaba Group Holding Ltd (NYSE:BABA) and Baidu which directly rely on consumer’s purchasing power as a key revenue stream.
Baidu Inc. (ADR)(NASDAQ:BIDU) is already expanding into other key areas having sealed a $600 million investment in taxi hailing service Uber seen as one of the key areas to spur growth going forward. Internet penetration levels in China are growing sure to accord the likes of Alibaba an expansive marketplace for goods and services that should spur further growth going forward.
Alibaba Group Holding Ltd (NYSE:BABA) continues to benefit a great deal from operating as a monopoly in one of the largest marketplaces in the world.
Cheung remains confident of Alibaba’s and Baidu long-term growth prospects at the back of the Chinese online landscape that is growing at an impressive rate. The dominance of Alibaba and Baidu has already been depicted by the fact that they remain the biggest earners in terms of ads revenue this year.
Opportunities for growth remain endless for Baidu and Alibaba Group Holding Ltd (NYSE:BABA) going forward as push for market share in international markets also heats up, expected to give the stocks the much-needed energy to surge even further.
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