Chinese e-commerce giant Alibaba Holdings Ltd (NYSE:BABA) has announced plans to offer its bargain service on Tencent Holdings Ltd.’s WeChat messaging platform, which is a major concession to an antitrust campaign.
Alibaba to launch Taobao Deals app in Tencent’s WeChat Platform
The growing antitrust campaign from Chinese regulators on web-based monopolies prompted Alibaba to take the move. Tencent and Alibaba have been rivals to the extent that they could block each other’s offerings from their platforms, but now they are on the verge of collaborating. Alibaba will have its Taobao Deals platform available in WeChat to meet some of the regulators’ requirements.
Under the collaboration, TaoBao Deals will start accepting transactions through online payment service WeChat Pay, which is a rival to Alibaba’s affiliate Ant Group’s Alipay. For a long, Alibaba had blocked WeChat Pay’s use on its retail platforms in China, including the Taobao Marketplace and Tmall. Similarly, Tencent’s WeChat transactions have been exclusive on the platform’s payment service.
According to sources, Alibaba is ready to launch a Taobao Deals lite app on Tencent’s WeChat and invite merchants to participate. Selling through the WeChat app means merchants can accept payments through WeChat Pay. However, Tencent will need to approve listings for any in-app platforms, often called mini-programs. It is still unclear whether the company will subject Taobao Deals lite to the same.
Over one billion people currently use WeChat, whose offering has moved beyond chatting to ride-hailing, online payments, and shopping. So far, there have been no comments from Tencent or Alibaba regarding the matter.
China intensifying crackdown on internet giants
The move is evidence that the Chinese regulator’s crackdown on monopolies is taking effect. Recently, Chinese regulators deleted Alibaba’s UC browser from the apps store. The Chinese antitrust watchdog made regulating internet companies its top priority as it cracks down on monopolistic behaviors that disadvantage smaller rivals. Last week regulators told Alibaba that its media assets were costly and it will need to unload some. Alibaba’s assets portfolio includes broadcast, print, digital, advertising, and social media.