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.