NEWS  /  Analysis

Alibaba's Core E-Commerce Platforms for the First Time Embrace Tencent's WeChat Pay

By  LiDan  Sep 05, 2024, 10:50 p.m. ET

This is the first time for WeChat and Taobao to achieve meaningful "interconnection" since being blocked from each other 11 years ago.

AsianFin -- Two Chinese internet behemoths achieve a milestone of partnership on their key businesses.  

Credit:Tencent

Credit:Tencent

Taobao and Tmall will provide new payment option through access to Tencent Holding Ltd’s WeChat Pay, and the adjustment will be applicable for all the merchants at these Alibaba Group’s core e-commerce platforms, according to a statement of  Taobao and Tmall Group Wednesday. The statement effectively allow payment through WeChat app for the first time, confirming a report from Chinese news media outlet Jieman that said Taobao plans to introduce WeChat Pay across its platform.   

Taobao is committed to improving consumers' shopping experience and is currently inviting merchants to activate the WeChat Pay service in batches, according to the exclusive customer service staff for Taobao 88 VIP members.

"We have always been open to collaborations and have actively explored interoperability and partnerships with our peers," an Alibaba spokesperson told CNBC. "We are constantly working to enhance the user experience by making shopping more convenient, enjoyable, and efficient."

WeChat Pay said that the function adaptation for Taobao platform merchants is under the way, and the following statement will disclose specific launch date. The  a mobile payment and digital wallet service by popular social media WeChat said it always adhered to the concept of open cooperation and actively explored interoperability and cooperation with various fields.

Openness, collaboration, innovation and sharing are the basic spirit of the internet and the general trend of industry, said Alipay, the mobile and online payment under Alibaba’s affiliate Ant Group. As WeChat’s main rival and Taobao’s major payment service provider, Alipay vowed to continue further strategic cooperation with Taobao and Tmall Group, increase technological innovation and product innovation and continue to create greater value for merchants and consumers.

This is the first time for WeChat and Taobao to achieve meaningful "interconnection" since being blocked from each other 11 years ago. Analysts believe that for Taobao, the nes cooperation will help further develop the sinking market, and for Tencent, it will directly bring in new income.Taobao and Tmall’s new adjustment marks leading Chinese tech firms are accelerating teardown of their “walled gardens”.

Chinese tech firms started opening up following the government’s direction. In September 2021, the Ministry of Industry and Information Technology (MIIT) of China held a meeting with companies Tencent and Alibaba and proposed standards to order all the internet platforms to be unblocked.  Ensuring normal access to legal URLs is the basic requirement for developing the internet, a senior official from the ministry said following the meeting. He added that unjustified blockages of web links affect users’ experience, undermine users’ rights, and disrupt market orders. Tencent that month later announced to allow users to access external links on WeChat in one-to-one channels. Tencent’s Creative Content Services Platform the same month applied for access to Douyin to share derivative videos from its copyrighted films and shows.

In the end of November, 2021, Tencent updated its rule to allow WeChat users to directly access to external links in the one-to-one messaging, and launch a feature to unblock the access to external links for e-commerce services on group chat as a trial. It also pledged to continue to promote stopping blocking each other’s links with other major internet platforms, and actively work with other platforms to implement MIIT’s proposal, explore technical possibility of other platforms’ smooth delivering WeChat services, so as to offer better experience to users.

Alibaba and Tencent said last October they decided to further cooperation on advertising, aiming to ramp up their preparation for Singles’ Day, or Double 11, the largest annual online shopping event in China. Under that partnership, two companies offer high-quality advertisements placed on Tencent’s short video feature WeChat Video Channel, its blogging feature WeChat Moments and mini-programs on the popular social media app through Alimama Uni Desk, Alibaba’s digital marketing platform, and the traffic from these WeChat’s features can be directly connected to shops and live-streaming rooms on Alibaba’s major e-commerce platforms Taobao and Tmall.  

Alibaba and Tencent also embarked on in-depth integration on crowd complementation, system co-construction and other areas to meet the different business objectives of merchants in three major business centers-- stores, live-streaming and content. The two companies collaborated in the Double 11 event and invested hundreds of millions dollar of subsidies to boost traffic and facilitate deals of online stores.

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