Alibaba Group Holding Ltd.’s market value has slumped to only about half that of rival Tencent Holdings Ltd. as the former’s e-commerce-centric business faces sluggish demand and intensified competition.

Alibaba, whose other main business line includes cloud computing, has a market capitalization of $201 billion, while Tencent, focused on social media and gaming, boasts $391 billion, according to data compiled by Bloomberg. Alibaba’s shares now trade around eight times forward earnings multiples, about half of Tencent’s 16 times.

Alibaba Friday abruptly ended its plan to spin off the cloud unit, citing heightened US restrictions on chip sales to China. The announcement, along with lower-than-expected domestic e-commerce sales in the September quarter, sent the stock tumbling about 10% in Hong Kong, its sharpest drop this year.

The companies’ value divergence points to other regulatory and macroeconomic issues that have troubled Alibaba. In recent years, China has sought to rein in the country’s tech giants, with regulators probing Alibaba affiliate Ant Group Co. and imposing a $1 billion fine on the fintech company backed by Jack Ma. Its market value had largely been higher than Tencent before China’s crackdown started in late 2020.

“China’s tepid consumption recovery and the heightened competition in the e-commerce space all make it harder for Alibaba’s business environment,” said Willer Chen, a senior analyst at Forsyth Barr Asia Ltd. “There were also greater regulatory concerns for Alibaba earlier that weighed on investors sentiment.”