(Bloomberg) – China’s largest e-commerce company, Alibaba Group Holding Ltd., plans to offer its fast-growing bargaining service with Tencent Holdings Ltd.’s competitive WeChat messaging platform internet sphere, according to people with knowledge of the matter.
Alibaba and Tencent have long excluded each other’s services from their platforms and created so-called walled gardens within their ecosystems. Now Alibaba is planning to set up a Taobao Deals lite app on Tencent’s WeChat and, according to the people, has already invited a few retailers to participate. The sale through the WeChat super-program means that merchants can now accept the payments that can be accepted by WeChat Pay, a service banned on Alibaba’s marketplaces, asking the people not to be identified as they do not authorized to provide the information.
Tencent will have to approve the listing of any in-app platforms – commonly known as mini-apps – and it is not clear whether the company will do so with the Taobao Deals lite app. More than one billion people use WeChat, which has evolved beyond chat to offer platform rides, online shopping and payments. Representatives of Alibaba and Tencent did not immediately respond to requests for comment.
The move is one of the clearest indications that Beijing’s repression of monopolies will take effect. The Chinese antitrust watchdog has made the regulation of internet companies one of its top priorities, repelling the monopolistic behavior of alliances that express smaller competitors to enforce exclusive arrangements and exorbitant prices. President Xi Jinping on Monday called for greater oversight of the “platform” economy, indicating that Beijing is getting ready to bolster its campaign against its tech giants.
Read more: Xi warns against technical excess in the suppression of signs will increase
Alibaba’s origins are mainly in online shopping and Tencent’s main businesses in social media and games, but over the years the businesses have entered each other’s territories. WeChat launched e-commerce in 2017 through brands such as Starbucks Corp and WalMart Inc. allow them to sell through their mini-apps, a business that raised $ 240 billion last year. The group Alipay, Alipaba’s subsidiary Alipay, also competes head-to-head with WeChat Pay and the two services cover more than 90% of the Chinese online payment market.
The influence of the companies extends beyond their core businesses. The two sites have created separate bodies in China’s technology industry through their protection. They bought promising beginners and invested in others to increase their reach. Only a few companies – the TikTok owner ByteDance Ltd. – is a notable exception – thrived without entering into an alliance with any giant.
Tencent has invested in JD.com Inc. and Pinduoduo Inc., whose e-commerce markets compete with Alibaba, and it is also a supporter of Meituan, which competes with Alibaba’s Ele.me service in food delivery. Meituan was sued last year by a user, who accused the platform of not being able to use Alipay from customers. The lawsuit is still pending, said Chen Pengfei, a lawyer at Beijing Shijing law firm representing the plaintiff.
In addition to its flagship Taobao and Tmall shopping platforms, Alibaba’s app presents the growing consumer needs of China’s smaller cities and towns, and aims to ward off fierce rival Pinduoduo. The mobile monthly average users of Taobao Deals exceeded 100 million in 2020, Alibaba said in its earnings. In February, local media 36Kr reported that a Taobao Deals gadget was added to WeChat for a short time before it was removed.
The twin giants were founded by many different billionaire entrepreneurs: Jack Ma at Alibaba and Tencent’s Pony Ma. Alibaba’s mother was the most visible target of the antitrust campaign after the flamboyant businessman criticized regulators ahead of Ant’s initial $ 35 billion public offering. The listing was drawn a few days before its debut and antitrust investigators launched an investigation into Mom’s flagship e-commerce corporation last year.
Unlike Jack Ma, his fellow billionaire tends to avoid the media and has skipped several important technology events for health reasons. However, he did not escape the scrutiny of regulators – Tencent was fined for not seeking approval for previous transactions, and people with knowledge of the matter said the firm’s fintech businesses could be the next target for greater oversight by financial regulators.
Read more: Tencent says China’s widespread collapse over Fintech, Deals
Tencent was earlier accused of banning services from competing technology companies on its platforms. ByteDance sued Tencent in February, alleging that its rival violated antitrust laws by blocking access to content from Douyin, TikTok’s Chinese twin, on WeChat and QQ. The Shenzhen-based company called the allegations unfounded and malicious.
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