Taobao launches "WeChat Pay", is China's Internet beginning to fight against involution?

With Taobao announcing that it will support WeChat Pay, the interconnection between Chinese Internet giants has taken a historic step. This move not only reflects the open and collaborative spirit of the Internet, but also heralds a more convenient shopping experience and a broader market prospect. In the fierce competition of e-commerce, this cross-border cooperation may be the key strategy to resist involution and seek win-win results. This article will explore the motivations, challenges and possible industry changes of this cooperation in the future.

On September 5, Taobao issued an announcement, clearly stating that WeChat payment will be gradually opened to all Taobao Tmall merchants after September 12.

The day before, Taobao Tmall (Taotian) announced that in order to improve the shopping experience of consumers, Taobao plans to add WeChat payment capabilities and is currently soliciting opinions on this. After the opinion solicitation is completed, Taobao will adjust the platform rules. This adjustment will cover all Taobao and Tmall merchants.

Since then, China's Internet connectivity has made substantial progress.

01 Taobao launches WeChat payment, further strengthening interconnection and interoperability

Many parties have expressed positive attitudes towards this interconnection.

Tencent said that WeChat Pay has always adhered to the concept of open cooperation and actively explored interoperability cooperation with various fields. Previously, WeChat Pay has successively carried out payment interoperability cooperation with UnionPay Cloud QuickPass, JD Pay, payment platforms under the three major operators, and digital RMB. In the future, it will continue to explore and provide convenience for users on the basis of ensuring transaction security.

Some people pointed out that the only one who was hurt by Taobao's integration with WeChat Pay was Alipay. In response, Alipay said: "Openness, collaboration, innovation and sharing are the basic spirit of the Internet and the general trend of industry development. Alipay will uphold this spirit and continue to deepen strategic cooperation with Taotian Group, increase technological innovation and product innovation, and continue to create greater value for merchants and consumers."

As of September 6, Bohu Finance found that the WeChat payment option has not yet appeared on the Taobao payment page. In response to this situation, Taobao's official customer service responded that WeChat payment is still in the trial stage and has not yet been fully opened.

(The WeChat payment option has not appeared in the Taobao App yet)

Interestingly, as Taobao and WeChat Pay broke the ice, Meituan Waimai and Alipay also "shaked hands" in a friendly manner. On September 4, Meituan Waimai and hotels opened Alipay mini programs and carried out joint operations. It is reported that since 2020, Meituan's bicycle, power bank, medicine purchase, takeout and other businesses have successively cooperated with Alipay.

It is generally believed in the industry that with the addition of WeChat Pay to Taobao and the in-depth cooperation between Meituan and Alipay, China's Internet will usher in a new round of "interconnection and interoperability", bringing win-win results to all parties.

(Meituan takeaway can be paid by Alipay)

02 Why do we need interconnection?

Every time there is a slight progress in interconnection, the media will inevitably mention the term "grouping together for warmth". In fact, this is indeed an important role of interconnection.

Since the beginning of this year, the competition among e-commerce platforms has been ups and downs. At the beginning of the year, the platforms competed to deepen the label of low prices, trying to cover a wider range of consumer groups. But it is obvious that not all platforms can be as willful as Pinduoduo when it comes to low prices.

Alibaba just couldn't bear it. In the second quarter of this year, Alibaba maintained the state of "increasing revenue but not increasing profits" in the previous quarter. The financial report shows that Alibaba's revenue in the second quarter of this year was 243.236 billion yuan, a year-on-year increase of 4%. At the same time, Alibaba's net profit in the second quarter was 24.022 billion yuan, a year-on-year decrease of 27%; the net profit attributable to ordinary shareholders was 24.269 billion yuan, a year-on-year decrease of 29%.

The atmosphere of involution is very strong, and major platforms are looking for new outlets.

It is worth mentioning that in the past, in order to consolidate their own competitive barriers, Alibaba and Tencent blocked each other. But this blocking brought a boomerang that one day came back to them.

Pinduoduo has become the biggest competitor of Taobao's e-commerce by relying on WeChat social traffic; in order to obtain traffic, Taobao has turned to establish links with platforms such as Douyin, Kuaishou and Xiaohongshu.

Given the current situation, banding together for support has become one of the few breakthrough options among platforms.

Zhang Yong, former CEO of Alibaba, once affirmed the value of interconnection and interoperability: "Interconnection is the original intention of the Internet, and openness is the foundation of the digital ecosystem. The social value that can be generated by the large circulation between platforms must be far greater than the small circulation within a single platform. The interconnection and openness between platforms will result in a win-win situation."

Take Tencent and Alibaba as examples. Tencent owns the largest traffic pool in the country, while Alibaba's advantages lie in e-commerce and payment. The combination of the two is bound to make the pie bigger.

According to 36Kr, after Taobao and Tencent launched WeChat Pay this year, analysts estimated that Taobao's daily new DAUs are expected to be in the millions, with the main groups being elderly users over 55 and young users between 18 and 26. For Tencent, the most direct benefit of this cooperation is new income.

03 Why is intercommunication so difficult?

Four years ago, Meituan removed the Alipay option from its payment interface. At that time, facing doubts from the outside world, Wang Xing asked on Fanfou: "Why doesn't Taobao support WeChat Pay?"

At that time, Taobao and WeChat had blocked each other for many years. In other words, interconnection was not that easy.

In September 2021, relevant business departments of the Ministry of Industry and Information Technology held an "Administrative Guidance Meeting on Blocking URL Links" and put forward compliance standards for instant messaging software, requiring all platforms to lift the blocking according to the standards before September 17.

At that time, the giants nodded their heads and expressed their willingness to cooperate actively. But later actions showed that this interconnection action was like "squeezing toothpaste", you squeeze a little today, I squeeze a little tomorrow. Those who squeezed too much have to go back.

In February this year, "Taobao orders can be paid directly with WeChat" was a hot search. At that time, Taobao's official customer service responded that the WeChat payment function is currently only available to some users and only supports the purchase of some products. According to reports, this function will gradually cover all users. After more than half a year, there is finally new news.

After years of tug-of-war, what exactly is the difficulty in achieving interconnection and interoperability?

Tencent President Martin Lau once said on the issue of platform interconnection that Tencent's ecosystem is essentially open, but the practical problems faced by platform interconnection include whether the large subsidies provided by resource-rich platforms will affect merchants on the WeChat platform; whether Tencent can deal with issues such as counterfeiting and piracy on other platforms; and how Tencent should respond to the completely different business policies between platforms.

Ultimately, connecting platforms is a complex issue.

Jiao Haitao, a professor at the School of Civil, Commercial and Economic Law of China University of Political Science and Law, also mentioned that "interconnection may still have a limit. It must not be completely open or completely data-sharing as radical views suggest. Reasonable boundaries still need to be drawn up."

Faced with various risks, extending an olive branch has become the safest path for mutual exploration.

After more than half a year, the "toothpaste" of interconnection has been squeezed a little more. What is different is that this time it was evaluated as: "A historic ice-breaking moment, the core load-bearing wall between large factories has finally been removed."

At a time when involution is the norm, mutual communication may be a way to combat involution.

References:

1. Daily Economic News: Netizens are excited! Taobao announced that it will support WeChat payment and plans to adjust platform rules to cover all merchants! Tencent, Alipay and others responded, and experts interpreted

2. Chinese entrepreneurs: Alibaba and Tencent compromised

3. Bohu Finance: Taobao has launched “WeChat Pay”, how far will it take for the two to be interoperable?

4. Economic Observer: WeChat public accounts, Douyin and Baidu are interconnected? The next step of interconnection: where are the boundaries and the future?

5. Blue Whale Finance: Alibaba's second quarter "increased revenue but not profit", and the number of employees decreased by 6,729 *The copyright of the cover image and accompanying images of the article belongs to the copyright owner. If the copyright owner believes that his work is not suitable for public viewing or should not be used free of charge, please contact us in time and this platform will correct it immediately.