Photographer: Gilles Sabrie / Bloomberg
Photographer: Gilles Sabrie / Bloomberg
The largest e-commerce operator in China Alibaba Group Holding Ltd. intends to offer their fast-growing bargaining service on Tencent Holdings Ltd’s WeChat messaging platform. in a big discount for regulators trying to crack down on monopolies in the internet realm, according to people with knowledge of the issue. .
Alibaba and Tencent has diverted each other’s services from their platforms, creating walled gardens known as the interior of their ecosystems. Now, Alibaba plans to install the Taobao Deals lite app on Tencent’s WeChat and has already invited some merchants to participate, according to the people. Sales through the WeChat super-app mean buyers will now be able to accept payments made through WeChat Pay, a service that was banned on Alibaba markets, the people said, requesting that be identified as not having the authority to talk about information.
Tencent needs to allow listing of any in-app platforms – commonly known as small programs – and it’s unclear if the company will do that with the Taobao Deals lite app. More than a billion people use WeChat, which has evolved beyond chat to offer riding, online shopping and payments on its platform. Representatives from Alibaba and Tencent did not immediately respond to requests for comment.
The move is one of the clearest signs that Beijing’s crackdown on monopolies is coming to fruition. An anti-trust watchdog in China has ruled internet companies as one of its top priorities, cracking down on monopolistic behavior from alliances that are pushing out smaller competitors to restrictive settlements. and pushing predatory prices. President Xi Jinping on Monday called for more control over the “platform” economy, revealing that Beijing is preparing to step up its campaign against its technical giants.
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While Alibaba’s roots are largely in online shopping and Tencent’s core businesses are in social media and games, the companies have, over the years, expanded into each other’s areas. WeChat entered e-commerce in 2017 by releasing brands such as Starbucks Corp. and WalMart Inc. sell through their mini-apps, a an industry that generated $ 240 billion last year. Alibaba-affiliated Alipay will be owned by Ant Group Co. also face-to-face competition with WeChat Pay, and the two services together make up more than 90% of China’s online payments market.
The influence of the companies goes beyond their core industries. The two behemoths have created separate fiefdoms within China’s tech industry through their supports, buying promising start-ups and investing in others to expand their reach. Only a few companies – the owner of TikTok ByteDance Ltd. is a notable exception – has succeeded in not forming an alliance with the second giant.
Tencent has invested JD.com Inc. and Pinduoduo Inc., whose e-commerce markets compete with Alibaba, is also a back-up to Meituan, which competes with Alibaba’s Ele.me service in food delivery. It was Meituan sued last year by a customer, who accused the platform of preventing customers from using Alipay. The trial is still ongoing, said Chen Pengfei, a lawyer at Beijing Shijing Law Firm representing the complaint.
Outside of its Taobao and Tmall shopping platforms, Alibaba’s contract app caters to the growing consumption needs of China’s cities and towns and aims to waiting for hard competitor Pinduoduo. Taobao Deals monthly average mobile users exceeded 100 million in 2020, Alibaba said in its earnings. In February, the local media 36Kr reported that a small Taobao Deals program was added to WeChat shortly before it was removed.
The twin giants were founded by billions of different entrepreneurs: Jack Ma at Alibaba and Pony Ma at Tencent. Alibaba ‘s Ma had been the most visible target of the anti – trust campaign after the flamboyant businessman criticized regulators ahead of Ant’ s first $ 35 billion public offering. The listing was pulled just days before analysts began their discussion and trust last year to investigate major e-commerce group Ma.
Unlike Jack Ma, his fellow billionaire has tended to avoid the media and has avoided a number of major technological events for health reasons. However, it did not escape a regulatory inquiry – Tencent has been fined for not seeking approval for expired contracts and people with knowledge of the case have said fintech businesses may be failing. the company’s next target for more guidance with financial regulators.
Read more: Tencent said to address China’s widespread ban on Fintech, markets
Tencent has previously been accused of interrupting services with competing tech companies on its platforms. ByteDance in February sued Tencent, alleging that its competitor had violated anti-trust laws by blocking access to content from Douyin, a Chinese pair of TikTok, on WeChat and QQ. The Shenzhen-based company has called the allegations baseless and malicious.