Taobao merchants are welcomed
Most parents with young kids experience non-stop bickering over who gets which toy or which TV show to watch. More often than not, adults have to intervene and impose a solution.
Last week, the Chinese government stepped into the role of impatient parent when it made internet giant Tencent further open up its WeChat ecosystem to internet rivals including archnemesis Alibaba. With very little enthusiasm – in the form of a blog post – Tencent announced it would “soon” begin testing a function to allow group-chat participants to share links from third-party e-commerce platforms on its messaging app WeChat.
That was a big deal for Alibaba as Tencent has banned links to external shopping sites like Tmall and Taobao on WeChat. It has also faced repeated criticism from Bytedance, the owner of TikTok’s sister app Douyin, for blocking links to the short-video platform, although the latest development seems to relate only to links for online shopping.
“We will continue to work with major internet platforms to push interoperability under the guidance of the regulatory authorities,” Tencent added in the statement.
The move came just days after China’s Ministry of Industry and Information Technology (MIIT) suspended Tencent from upgrading its apps on data privacy concerns, which most observers took as a warning to the social media giant. It was also likely be a response to Beijing’s recent push to encourage competition and curb monopolistic behaviour in the internet sector.
Back in September, under pressure from the regulators, Tencent made its first moves to unblock its platforms. Since then, WeChat has allowed users to share links, including those for Taobao and short video app Douyin, in one-to-one chats. The difference this time round is that users can now share links in group chats, which makes it even easier to drive traffic from WeChat – which has over a billion users – to shopping sites.
Tencent has stopped short of opening up its application programming interface (API), which means that users can only send and receive the most basic hyperlinks from rival Alibaba. They will also have to log into their own accounts on the e-commerce platform in order to access the information contained in the links. WeChat does allow APIs for Pinduoduo and JD.com (it owns stakes in both companies), which means that their links are able to display more information and graphics.
“The latest development is what both parties can accept but neither party is going to be satisfied. Tencent has fulfilled its commitment to the authorities, while Alibaba has received some traffic from WeChat. However, when it comes to efficiency in acquiring WeChat traffic, Alibaba is still a long way from Pinduoduo and even other smaller e-commerce firms,” 36Kr.com observed. “Of course, for Alibaba, the ideal scenario would be to send hyperlinks with pictures and texts to WeChat users. But that would definitely spell disaster for Pinduoduo and JD.com. These two should be even more resistant to that than Tencent.”
Industry observers reckon that the moves are beneficial to the e-commerce industry in the long run. “WeChat allowing users to share external links will bring a lot of traffic to e-commerce firms. Already, there are 1.25 billion monthly active users in China. Even if only 1% of the users share external links, that means there would be an addition of 12 million page views. As the habit of sharing external link traffic becomes more ingrained, traffic will no doubt gradually increase,” Pan Helin at Zhongnan University of Economics and Law told Economic Daily.
So far, merchants say the opening up of external links on WeChat hasn’t made a substantial difference to their businesses. Nevertheless it is another step towards the Chinese government’s goal of improving connectivity between the major fintech and social media platforms. Also under antitrust pressure to open up its payment gateway Alipay to rivals, Alibaba said last week it has achieved mutual recognition of QR codes for receiving payments from UnionPay.
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