taobao supports wechat payment, and the platform's "breaking the wall" has attracted cheers from many parties
2024-09-14
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[global times reporter zhao jueyun, yang shasha, global times special correspondent in the uk ji shuangcheng, ren zhong] starting from september 12, taobao and tmall officially added wechat payment capabilities and gradually opened them to all merchants. some foreign media commented that this is a milestone event in breaking down barriers between chinese internet giants. on september 5, taobao issued an announcement on the addition of wechat payment capabilities, and stated that it would be gradually opened to all taobao sellers after seven days of public announcement. on the 12th, the topic of taobao supporting wechat payment was on the hot search on multiple platforms, and many merchants and consumers said they had been looking forward to it for a long time. previously, the dispute between wechat and apple over the "apple tax" for mini-program payments was still causing aftermath. regarding the accelerated integration of chinese internet platforms, experts told the global times reporter that a healthy digital industry ecosystem should be open and collaborative, and giants should abandon the practice of "enclosing land" and "building walls."
breaking down barriers and ushering in new business models
regarding the new payment methods added by taobao and tmall, alipay responded: "openness, collaboration, innovation and sharing are the basic spirit of the internet and the general trend of industry development." wechat pay also responded: "wechat pay adheres to the concept of open cooperation and actively explores interoperability and cooperation with various platforms. currently, the function adaptation with the taobao platform is being opened."
on the 12th, when a reporter from the global times tried to choose a payment method on multiple e-commerce platforms under alibaba, he found that taobao official flagship stores such as nike and estee lauder and dozens of stores in the fields of beauty, maternity and baby, sports, and clothing did not yet support wechat payment. in response, taobao customer service said that it is currently inviting merchants to open wechat payment in batches.
reuters reported that alibaba's alipay is wechat's main competitor in china's online payment field, and tencent is also a major investor in other e-commerce platforms, including alibaba's competitors jd.com and pinduoduo. the report said that under china's original e-commerce landscape, users could only use tencent's payment system on tencent's platforms and only use alipay on alibaba's platforms, but this "walled garden" situation has gradually been broken. since 2021, wechat users can share product links on alibaba's e-commerce platform, but cannot complete transactions through wechat pay.
the wall street journal reported that china's large technology companies are gradually moving towards interconnection, which is a milestone towards breaking down the barriers between china's internet giants. for a long time, china's consumer internet has been "separated into one side" by several giants such as alibaba and tencent, blocking each other's services and links. the chinese government began to rectify the domestic internet industry at the end of 2020. in 2021, chinese regulators required internet companies to open up their ecosystems. since then, some "ali-based" services and applications, including food delivery platforms ele.me and youku, have supported users to use wechat pay. tencent's wechat has also begun to allow users to access taobao links in the app. the report quoted norris, research and strategy manager at shanghai consulting firm agencychina, as saying: "if this trend continues, the 'wall' will be broken, and a brand new business model may be ushered in."
hong kong's south china morning post said that many chinese merchants are excited about the latest cooperation between the country's largest online trading market and the second largest mobile payment service. many hope that this move will expand their consumer base in a highly competitive market. merchants and analysts said that the formal introduction of wechat pay is expected to help alibaba attract more elderly consumers and shoppers in second- and third-tier cities.
experts: "reconciliation" is a wise move
before wechat and taobao opened up payment, jd pay had already achieved interconnection with wechat pay. market information shows that wechat pay users have exceeded 1 billion, and jd pay users have exceeded 500 million. jd responded to the global times reporter that the interconnection is carried out with the jd finance app as a carrier, and at the merchant code interconnection level, it has been piloted in some merchants, and will be gradually opened up to all merchants in the future.
the "opinions of the general office of the state council on further optimizing payment services and improving payment convenience" issued in march this year proposed that, based on the payment habits of different groups, efforts should be coordinated to clear the bottlenecks in payment services, bridge the digital divide, and strive to improve a multi-level and diversified payment service system.
some analysts believe that the interconnection between taobao and wechat pay will not only create a better experience for consumers, but also create more business growth opportunities for merchants on the taobao and tmall platforms. previously, some users who preferred to use wechat pay, as well as some users in the lower-tier markets, were unable to consume smoothly on the taobao and tmall platforms due to payment capacity limitations. after taobao added wechat pay capabilities, these users have the opportunity to become new additions to taobao and tmall merchants.
wall street investment banks also responded quickly. morgan stanley, goldman sachs and other wall street investment banks released research reports praising taobao's integration with wechat pay, believing that both parties will achieve a win-win situation.
zhu keli, executive director of the china information association and founding dean of the national research institute of new economy, told a global times reporter on the 12th that the settlement between alibaba and tencent in the payment field mainly came from the intensification of market competition, which made both companies realize that continuing to "encircle the land" would only limit their own development space. through cooperation, the two sides can share user resources, improve payment efficiency, and reduce operating costs, thus achieving a win-win situation. in addition, as regulatory policies become more stringent, companies have to consider compliance issues. settlement can avoid legal risks caused by illegal operations and maintain the company's reputation and image. this settlement is a wise move in both directions.
hong yong, an expert from the think tank of the china digital reality integration 50 forum, said in an interview with the global times that the "reconciliation" between alibaba and tencent on payment is mainly in response to market demand and policy guidance. on the one hand, both companies hope to operate in a more open environment to attract more users and improve user experience; on the other hand, the government's requirements for interoperability between platforms have also prompted this change. for alibaba, access to wechat pay can expand the payment options of its e-commerce platform and improve transaction convenience; and for tencent, this will also help wechat pay further penetrate e-commerce scenarios and increase user stickiness.
hong yong believes that a healthy digital industry ecosystem should be open and collaborative, allowing fair competition among different companies while protecting users' data security and privacy rights.
apple's situation
the "reconciliation" between alibaba and tencent did not make people ignore another "battle of giants". germany's heiss media website said on the 9th that apple inc. of the united states has made concessions in the "app store commission dispute" with tencent. not only did apple not restrict the latter's most important application wechat, but it approved the update of the program. it was previously speculated that apple may no longer allow wechat, a "super app", hoping to get up to 30% commission from the sales, in-app payments and subscriptions of the app. in other markets, apple has been very tough and has been in a legal dispute with epic games, the developer of the game "fortnite", over in-app payments for many years. however, considering the importance of wechat in the chinese market, apple made concessions to wechat before the release of its latest mobile phone.
bloomberg said that the disagreement between the two companies focused on apple's insistence on taking a share of transactions on the wechat mini game platform, which brings together a large number of popular casual games created by independent developers. apple also asked the company to completely disable the in-game messaging function, but tencent rejected this request, believing that its approach was too radical.
bloomberg said apple has long been "monitoring" its app ecosystem, and the company has taken unusually aggressive steps in china this year - including warning not only tencent but also bytedance about in-app consumption policies. this could alienate creators in a key area. unlike the united states, apple does not rank among the top sellers in china's smartphone market - it did not even make the top five last quarter. and chinese companies such as tencent and bytedance still dominate internet content such as games and videos. apple reported a 6.5% decline in revenue in greater china in the june quarter, highlighting the challenges it faces in china, its largest market outside the united states.
compared with other markets, eu countries have shown a more proactive attitude in legal ways to solve the problem of abuse of digital platforms. in march 2024, the digital markets act (dma) launched by the eu requires large digital platforms identified as "gatekeepers" to report to regulators whether they have complied with the provisions of the act. as one of the technology giants identified as "gatekeepers", apple announced at the beginning of this year that it would change the apple app store rules in the eu to comply with the requirements of dma. for the "apple tax", application developers in the eu market only need to pay apple a 17% commission in the first year, and the rate will be reduced to 10% from the following year, which is much lower than the commission rate in the united states. previously, google also made adjustments for similar reasons. on july 20, 2022, google announced that in order to comply with eu regulations, the company will reduce the commission rate for google play non-game application developers using third-party payment systems from 15% to 12%.
"the reason why similar phenomena such as 'apple tax' appear is essentially due to the pursuit of profit maximization driven by market competition." zhu keli believes that some giants tend to build closed ecosystems to safeguard their own interests and consolidate their market position by controlling data flow and access rights. he said that with the accelerated development and application of ai technology, the healthy development of the digital industry ecosystem needs to be based on openness, cooperation and win-win. giants should abandon the practice of "enclosing land" and "building walls", actively embrace an open ecosystem, and promote the sustainable and healthy development of the industry through technological innovation and cooperative sharing. at the same time, regulatory authorities should also strengthen supervision to ensure the fairness and effectiveness of market competition.
