On Wednesday, Alibaba announced that it would introduce Tencent’s WeChat Pay as a payment option on its primary e-commerce platforms, Taobao and Tmall, marking a significant shift in its payment strategy. Previously, these platforms predominantly promoted Alipay, operated by Alibaba’s affiliate Ant Group, also founded by Jack Ma.
An Alibaba spokesperson expressed to CNBC the company’s longstanding openness to collaboration and its continual efforts to improve the shopping experience by making it more convenient, enjoyable, and efficient. The integration of WeChat Pay, which boasts over 1.3 billion users mostly in China, is set to begin this month, according to a source familiar with the matter.
This strategic decision is part of Alibaba’s broader aim to stimulate growth within its Chinese e-commerce sector, which faces challenges from a slow consumer market and competition from firms like JD.com and PDD, the owner of Temu. Alibaba’s CEO, Eddie Wu, has projected that Taobao and Tmall will see growth in the latter half of fiscal year 2025.
Incorporating WeChat Pay could potentially expand Alibaba’s reach in China’s less developed regions, enhancing its market position. JD.com, Alibaba’s main competitor, has long supported payments via WeChat Pay on its platform.
The backdrop of this development includes the heightened regulatory focus on China’s tech giants. The government has been pressing these companies to dismantle the “walled gardens” that hinder competition by blocking rival products. Both Alibaba and Tencent, which have established their dominance through expansive services centered around their super apps, have faced significant scrutiny.
This pressure has led to a gradual shift in practices among tech giants. In 2021, Tencent modified its app to allow users to access external links in private chats, such as opening a Taobao link directly in WeChat. Similarly, Alibaba’s other apps began supporting WeChat Pay that year.
The announcement comes after China’s market regulator noted last week that Alibaba had completed a three-year “rectification” process following a substantial antitrust fine in 2021.
