Online search giant Baidu Inc is set to lose its top spot in the nation's booming digital advertising market this year to its rival Alibaba Group Holding Ltd, according to a report from London-based market research firm eMarketer.

E-commerce heavyweight Alibaba has so far notched up a 28.9 percent share of China's digital ad market, equating to $12.05 billion, said eMarketer, which researches digital marketing, media and commerce.

In previous forecasts eMarketer had predicted that Baidu, which uses search result listings to generate income from advertisers, would stay out in front. Last year, Baidu earned 28 percent of China's digital advertising revenue, compared to Alibaba's 24.8 percent.