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text丨qiu hao and guan yiwen

editor: guan yiwen

we have learned that taobao and tmall will soon be officially connected to jd logistics, which is expected to go online in mid-october. after that, taobao merchants will have an additional option of jd logistics when choosing the delivery method of goods in the system. at the same time, jd will also be connected to cainiao express and cainiao post station, which are cainiao's self-operated express brand and the station for collecting parcels.

we also learned that jd.com will also officially integrate alipay payment, which is expected to be launched on the eve of double 11. currently, when consumers place orders on jd.com, the default payment methods are jd.com payment, cloud quickpass, wechat payment, etc.

it is reported that the two parties have reached an agreement on cooperation in logistics and payment today.

this is the biggest handshake between alibaba and jd.com in the 20 years since their establishment. over the years, the two companies have been fighting and guarding against each other, competing for merchants and consumers with traffic, commissions, subsidies, etc., and marketing opinions have been choking each other. they have each established independent systems such as logistics and payment, competing all the way, growing up together, and then met a younger common opponent in the past few years.

since taobao has already connected to wechat pay, it is not surprising that alibaba and jd.com are opening up to each other. on september 26, taobao officially announced the addition of wechat pay to consumers. we learned that wechat pay is expected to be fully connected to taobao merchants by the end of september, and more than 90% of merchants have already opened the service.

at this point, the infrastructure of china's largest internet platforms has almost become a universal commercial infrastructure. this also continues the previous trend that competition will eventually eliminate all monopolies, and all business actions will be accounted for - choose the most effective partners, pursue the ultimate efficiency, and welcome the fierce competition in the future.

alibaba embraces jd logistics, jd removes payment wall

many industry insiders and taobao merchants said that adding a jd logistics delivery option to taobao will not have a big impact, but it will also bring new possibilities.

prior to this, among the e-commerce express delivery service providers that taobao merchants could choose, sf express provided good and convenient services, and tongda (zhongtong, yuantong, shentong, yunda) and jitu provided high cost performance. pinduoduo connected jd logistics to its platform in march 2022.

the industry generally compares jd logistics' express delivery business with sf express. compared with tongda express, their unit prices are higher, delivery times are faster, and they can deliver goods to your door. jd logistics is closer to the goods, and its integrated warehouse and distribution supply chain network is its biggest feature that distinguishes it from other logistics companies.

according to our understanding, in the third quarter of 2023, the combined share of the three express delivery companies (zto, yto, sto, and yunda) in the taobao e-commerce package volume was nearly 80%, while sf express only accounted for about 6%, which is almost half of the fifth-ranked jitu.

however, for merchants and consumers, it is not bad for large platforms to be willing to open up interfaces and data to provide one more option. "when there is pain, people will think about change. someone has to take the initiative," said a women's clothing merchant.

originally, merchants needed to divide their products into two batches on taobao and jd.com and manage them separately. after taobao joins the jd logistics option, there is hope that they can be integrated into one batch of goods in the future, which can help merchants increase product turnover and also help improve consumer experience.

for jd logistics, the access of taobao merchants will definitely bring about an increase in the number of express orders. another benefit is that if the logistics are smooth enough in the future, merchants can put some goods in jd's warehouse and ship them directly after receiving taobao orders, increasing the scale of merchants using jd's warehouses. some tmall brand merchants are already using jd logistics' warehouse management services.

different from traditional express delivery companies, jd logistics also provides integrated supply chain solutions. in the first half of this year, the revenue from this item was 41.8 billion yuan, accounting for nearly half of the total. in addition to jd retail, its major customers also include volvo, ideal, feihe, bosideng and other industry customers.

integrated supply chain means that jd logistics intervenes from the sales stage to help industry customers predict sales, manage orders, and warehousing and distribution to reduce fulfillment costs and delivery time. jd logistics currently operates more than 1,600 warehouses and more than 2,000 cloud warehouses in china, including more than 40 highly intelligent asia no. 1 smart logistics parks. even in tibet, xinjiang and other regions, jd logistics can achieve the fastest same-day delivery.

cainiao's domestic supply chain business is benchmarked against jd logistics. in recent years, it has also begun to build its own warehousing and transit systems. its largest customer is alibaba's self-operated tmall supermarket, but its scale effect is not as good as that of jd logistics, which invested earlier and more heavily.

a taobao insider said that before, several taobao self-operated businesses, including tmall supermarket, had discussed cooperation with jd logistics and had made substantial progress, but finally gave up the cooperation. "this was a correct but difficult decision because the solution jd could provide was more attractive than cainiao."

the situation is different now. we have previously analyzed that taotian’s integration with wechat pay will put alipay’s online payment market share under short-term pressure; taotian’s integration with jd logistics is similar, which will bring some challenges to cainiao, a logistics system also within the alibaba system.

a logistics industry analyst believes that the most core driving force for both parties to move from closed to open is cost reduction.

taotian has established its own logistics department in may 2023. judging from the organizational design and recruitment needs at the time, taotian logistics department is mainly responsible for the coordination and management of the logistics supply chain - formulating logistics solutions, warehousing management, fulfillment standards, etc. for merchants, but the front-line operations are still handed over to express companies.

previously, when consumers wanted to return or exchange products they bought on taobao, cainiao kuaigou was responsible for receiving the products. however, taobao’s own logistics department is now directly responsible for this business, directly connected to the courier company headquarters, and re-tenders and allocates returns and exchanges in exchange for lower costs and higher operational efficiency. the above-mentioned logistics analyst described it as “a matter of accounting, eliminating middlemen, and whoever can offer a lower price will be competitive.”

we also learned that jd.com will reconnect to alipay after 13 years. in may 2011, jd.com announced the termination of its cooperation with alipay. according to media reports at the time, alipay's fee rate was four times that of other third-party payment providers, and jd.com paid more than 5 to 6 million yuan a year for this. pinduoduo has always been able to use alipay and wechat pay, but it also launched duoduo pay at the end of 2020, also wanting to create a "closed loop".

but today, whether online or offline, alipay and wechat pay have become payment infrastructures that most chinese people cannot do without; and jd pay started by serving jd itself. we understand that jd pay has gradually opened up the external market through interconnection with mainstream payment methods, and is also accelerating its access to other internet platforms including alibaba.

after connecting to alipay, jd.com has an additional payment channel used by 900 million users per month, although it had already connected to wechat pay 10 years ago, and the latter now has more than 1 billion monthly active users.

after connecting with jd.com, alipay is expected to regain some of the market share it lost due to the introduction of wechat pay by taobao, but not too much.

the platform’s infrastructure is almost open, but it’s far from smooth.

the fact that the logistics and payment tools of internet platforms have become social infrastructure today largely relies on the era of all-out competition - everything has to be done by themselves, and large companies rely on investment and the establishment of closed systems to complete the business loop and squeeze out competitors on their own territory as much as possible.

in 2013, alibaba, realizing that logistics services were dragging down the development of e-commerce, joined forces with several express delivery companies to establish cainiao network, using a light-asset approach to do logistics business. in the same year, jd.com, which had already stopped cooperating with alipay and obtained a payment license, officially entered the payment field and launched the "jd baitiao" product, which was earlier than "huabei", which allows customers to consume first and pay later.

as the regulatory environment changes and competition becomes more brutal, platforms have to abandon their closed systems and winner-takes-all mentality and pool all their strength and means to capture users.

according to ant group's 2020 prospectus, taobao only accounted for about 6% of alipay's total annual transaction volume; cainiao and jd logistics now both account for about 70% of their external customer revenue. not being so dependent on internal groups and seeking more external cooperation is another major prerequisite for both parties to connect logistics and payment infrastructure.

now, the infrastructure of almost all major internet platforms is open.

all mainstream trading platforms such as e-commerce, food delivery, and taxi-hailing can now use wechat pay and alipay at the same time. taobao, pinduoduo platform merchants, and jd.com third-party merchants can use mainstream express delivery companies on the market. as for mini programs that need to open up more data and interfaces, jd.com's express delivery, home delivery and other businesses, as well as almost all of meituan's businesses, which were once alibaba's competitors, have entered alipay mini programs. alibaba's hema, ele.me, xianyu and other businesses have also been connected to wechat mini programs.

there are still exceptions. many merchants said that they are most concerned about when taobao will be included in wechat mini programs. on alipay, alibaba's core e-commerce competitors - jd.com, pinduoduo, and douyin - have not yet opened mini programs.

even though internet companies have opened up to each other, it is still in the early stages. it is like a new door opened in an old courtyard, but it is far from smooth.

everyone is open to each other, but there are still some grudges. for example, alipay is still hidden in the drop-down menu of payment options for meituan and dianping, and wechat pay is hidden in the drop-down menu of douyin; when sharing product links to wechat, douyin can only share garbled passwords, taobao is a text link to the product, pinduoduo is a product link card, and jd is directly a wechat mini-program.

each platform also prefers its own business. starting this year, certain products in pinduoduo's 10 billion subsidy channel only support duoduo payment, such as apple's new products such as iphone 16; jd.com's recent massive 50% off clothing event also requires jd.com payment to enjoy large discounts such as 300-150 yuan for purchases over 200 yuan and 100 yuan for purchases over 300 yuan.

previously, pinduoduo required users to place orders and settle accounts only through the app, and did not support purchases within the mini program, in order to guide more users to download the pinduoduo app. wechat officially stopped providing technical services for jumping from the mini program to the app in may 2021. now both jd.com and pinduoduo’s wechat mini programs can place orders and pay directly, but only wechat pay can be selected, not jd.com pay and duoduo pay.

when all platforms can choose the same infrastructure, competition will return to efficiency itself.

title image source: visual china