As of Thursday, Tencent’s market cap exceeded $246 billion USD, overtaking Alibaba’s market cap of $242 billion USD.

The switch reflected strong gains made by the social and gaming giant over the past quarter, driven by a handful of new investments including Clash of Clans game developer Supercell. It also points to a poignant truth about China’s consumer culture, and where the power lies – Tencent owns the country’s most valuable marketing tool, a social networking site with over 800 million users.

To be sure, Tencent’s triumph over Alibaba is not a definitive one. The two company’s stock prices faltered together in late 2015, and steadily resurged in unison during the first half of 2016. In September last year Alibaba’s stock dipped heavily enough to cede the title of Asia’s largest tech company to Tencent briefly, before retaking the lead.

The reasons for both Ali and Tencent’s upswing in 2016 are intertwined. Alibaba has managed to contradict expectations that the country’s retail market would suffer amid flatlining global growth, while Tencent has managed to channel the same sources of disposable wealth through their social platform with obvious benefits.

While the two companies have toed and froed, it’s important to note that Tencent’s market cap has outweighed Alibaba’s modestly but consistently in 2016, a role that was reversed in 2015.

Cate Cadell

Cate is a tech writer. She worked as a journalist in Australia, Mongolia and Myanmar. You can reach her (in Chinese or English) at: @catecadell or catecadell@technode.com

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