Anamika Dey, editor
Brief news
- Alibaba will now allow payments through Tencent’s WeChat application on its Taobao and Tmall e-commerce platforms.
- This move is aimed at reigniting growth in Alibaba’s China e-commerce business, which has been under pressure from sluggish consumer demand and competition from JD.com and PDD.
- The decision to permit WeChat Pay on its platforms is also seen as a response to regulatory scrutiny and a move towards eliminating “walled gardens” that inhibit competition.
Detailed news
Alibaba, the Chinese technology behemoth, announced on Wednesday that it will now permit payments through Tencent’s WeChat application on its primary Taobao and Tmall e-commerce platforms.
In the past, Alibaba’s Chinese e-commerce sites only accepted a limited number of payment options and promoted Alipay, a competitor of WeChat Pay, as one of the primary payment methods. Ant Group, an affiliate of Alibaba that was also established by Jack Ma, operates Alipay.
An Alibaba spokesperson informed CNBC, “We have consistently been amenable to collaborations and have diligently pursued partnerships and interoperability with our peers.” “We are consistently striving to improve the user experience by facilitating the shopping process and ensuring that it is both enjoyable and efficient.”
A source who was not authorized to disclose the details publicly, informed CNBC that Taobao and Tmall are likely to begin accepting payments through WeChat Pay this month.
The historic move is being made in an effort to reignite growth in Alibaba’s China e-commerce business, which has been under pressure from a sluggish Chinese consumer and from competitors such as JD.com and Temu-owner PDD.
Eddie Wu, the CEO of Alibaba, has previously stated that the Taobao and Tmall businesses are expected to resume development in the latter half of the company’s fiscal year 2025.
WeChat has a global user base of over 1.3 billion, with the preponderance of consumers residing in China. WeChat Pay is one of the most prominent mobile payment applications in the country.
Alibaba could, according to the source, expand its market share in less developed regions of China by permitting users to conduct transactions via WeChat Pay on Taobao and Tmall.
WeChat Pay has been permitted to operate on the platform of the organization’s largest competitor, JD.com, for an extended period.
Another theme that has been present in the background is the regulatory scrutiny that Beijing has imposed on Chinese technology companies, which is encouraging these companies to eliminate their so-called “walled gardens” that inhibit competitors’ products.
Alibaba and Tencent are two of the largest internet companies in China. They have achieved dominance by providing a wide range of services, which frequently revolve around their “super apps.”. This prominence resulted in a circumstance in which competitors would not permit access to each other’s services on their respective platforms for an extended period.
Over the past few years, tech titans have begun to modify these practices in response to regulatory criticism. Tencent initiated the practice of permitting users to access external links during one-on-one conversations in 2021. For instance, a user would be able to access a link from Alibaba’s Taobao in WeChat without having to exit the messaging app. WeChat Pay was incorporated into several of Alibaba’s other applications that same year.
Alibaba completed a three-year regulatory “rectification” process last week, following an 18.23 billion yuan ($2.6 billion) antitrust punishment the company received in 2021, according to China’s market regulator.
Source : CNBC News
