Here's Why Alibaba Is No Longer Top Choice For Shoppers After Ruling China's E-Commerce Market For 15 years

After being China's unbeatable e-commerce giant for more than 15 years, Alibaba Group Holding Limited BABA is facing growing competition in the market. 

As consumer behavior shifts from targeted product searches to browsing and interaction, competitors are exploring the area and trying to get a foothold in the market dominated by Jack Ma's Ali Baba.

According to a Wall Street Journal report, Ali Baba's share of China's retail e-commerce market has fallen to a projected 51% in 2021 from 78% in 2015. A shift in the consumer shopping format moving from search to browsing has worked against Alibaba. 

However, many Chinese consumers still go directly to Alibaba's Taobao or Tmall to look for products; others have been pulled into purchases while interacting digitally or consuming online content.

The WSJ quoted one of the Alibaba employees saying, "the Taobao Live app was revamped to enable sellers to share short lifestyle and product videos. The app also adopted other popular features from competitors, including improving its algorithms to provide more customized recommendations and building interactive circles for influencers and ordinary buyers to connect."

In May, Chief Executive Daniel Zhang listed increased competition as one of the company's biggest obstacles of the past year and said, "any profit that exceeded last year's would be poured back into improving its e-commerce businesses." Alibaba is investing more in content creation, live-streaming, and discount goods to gain momentum and tap this area.

In April, China's antitrust regulator imposed a fine of $2.8 billion after a monopoly probe found that the company had abused its dominant market position. 

The size of the penalty was determined after regulators decided to fine Alibaba 4% of its 2019 sales of 455.7 billion yuan. 

Alibaba shares closed Friday's session up 0.73% at $168.

Related Link: Alibaba Analysts Have Been Cutting Their Forecast For 12-Month Earnings Over Past 3 Weeks