Taobao's full introduction of WeChat Pay does not actually bring much growth, but it can attract some goodwill

Although the full introduction of WeChat Pay by Taobao is unlikely to directly drive significant growth, it is of far-reaching significance. This move conforms to the general trend of interconnection and interoperability, facilitates consumers, and may release the potential of Alipay and open a new chapter in the common payment tool. In the future, cooperation between platforms may be more extensive, and payment, marketing, supply chain and other fields are expected to be deeply integrated.

As early as the end of September, you can use WeChat to pay for purchases on Taobao.

On the afternoon of September 4, Taotian Group launched a solicitation of opinions on its merchant platform, announcing that it would add a new WeChat payment function.

Once Taobao has signed contracts with all merchants, it will fully support WeChat Pay. This means that when you buy things on Taobao, WeChat Pay, Alipay, Huabei, bank cards and other payment options will be displayed side by side on the payment page, just like Pinduoduo.

This is a familiar story, because Taobao had partially opened up WeChat payment at the beginning of this year, but because it was a small-scale grayscale test, consumers had almost no physical experience. According to Wandian.com, the negotiation for Taobao to connect to WeChat payment started half a year ago. Taobao took the initiative to initiate the negotiation, and the number of key personnel working on the cooperation was about 50.

This "ultimate" news may be the end of the grayscale test, and Taobao has officially decided to introduce WeChat Pay. From the details to the whole, Taobao may find that it really needs WeChat Pay.

After so much preparation, what significance can WeChat Pay bring to Taobao?

The fate of WeChat Pay is different from that of Alipay. WeChat Pay is built into WeChat, while Alipay is an independent app. This naturally allows WeChat Pay to cover many groups that Alipay cannot reach, such as older users or users in lower-tier cities.

There are many voices in the market that believe that Taobao’s introduction of WeChat Pay today must have been due to its eye on the benefits that Pinduoduo has gained from the ability to accept WeChat Pay.

What's more, China has officially entered a moderately aging society. The latest data from the National Bureau of Statistics shows that by the end of 2023, the population of my country aged 60 and above will be 297 million, accounting for 21.1% of the national population. Both older and younger users are an important growth factor for e-commerce, and older users have relatively high disposable income and are more likely to pay for high-priced, high-quality products.

However, Wang Pengbo, a senior analyst in the financial industry at Broadcom Consulting, told Zhiwei that "(introducing WeChat Pay and reaping the benefits of incremental users) has actually missed the best time." He believes that Taobao's introduction of WeChat Pay is more about the value of interconnection and interoperability, which may have significance for the future development of financial technology in the industry. "But from a commercial perspective, I think the payment industry is already very stable, and user usage habits are already fixed , so I personally think that WeChat Pay is unlikely to gain much incremental growth from Taobao."

Similarly, the incremental revenue that Taobao gains from WeChat Pay cannot necessarily be directly verified.

In other words, the biggest significance of Taobao's introduction of WeChat Pay lies in its significance to society and individual consumers . The former complies with the general trend of interconnection and is very well done on the surface. The latter is convenient for consumers and is also very popular on the surface. But it is difficult to say how much real increase this will bring to e-commerce itself. After all, the most practical GMV, daily active users and other data are not achieved by adding a payment method.

Wang Pengbo added, "Internet platform companies have actually become the infrastructure of the national application layer, which is as indispensable as water, electricity and coal. The mutual division between platforms will cause a factual division of information elements, capital elements, personnel elements and data elements. If the division becomes a fait accompli, it will not only hinder the innovation of small and medium-sized enterprises and the necessary changes in the industry, but will also increase the circulation costs of the industry, which goes against the original intention and original intention of the Internet. " He said that the significance of this part is already large enough. For payment institutions, interconnection and interoperability are an inevitable choice to actively respond to the call of relevant national departments and adapt to the high-quality development of the industry. It is in line with the overall development trend of the industry and society.

Taobao's recent series of actions also prove this point. This year, Alibaba cooperated with Douyin, with Douyin responsible for seeding and Taobao responsible for closing deals; Xianyu launched a WeChat applet; Bilibili supports jumping to Taobao live broadcast rooms... These past attempts may not have brought much actual benefits, but as long as they were done, they sounded sexy.

To put it bluntly, at present, the purpose of openness is openness itself.

Although it is difficult to conclude now that the introduction of WeChat Pay can bring in real traffic and money, but if we reverse the logic, there is still room for imagination on this matter. The convenience it brings to consumers will inevitably produce some changes.

At present, Alipay has gradually deviated from the attribute of a pure payment tool and is more like a collective financial tool, while WeChat does not yet have functions such as installment payment and advance consumption. In the field of e-commerce consumption, too much diversity is not a good thing. After all, to promote transaction efficiency, it is still necessary to simplify the transaction form. Douyin Pay and Meituan Pay will ask you whether you want to open a monthly payment on the transaction page, and even JD Baitiao tirelessly offers preferential policies. Clear and pure full payment is becoming increasingly rare, which is exactly where WeChat Pay excels.

Moreover, the payment options of mainstream e-commerce platforms such as JD.com, Pinduoduo, and Douyin, in addition to bank cards, almost all have more than two third-party payment tools to choose from, and they all guarantee the combination of their own payment + external payment . For example, JD.com is JD Pay + WeChat, Pinduoduo is Alipay + WeChat + Duoduo Wallet, and Douyin is also Douyin Pay + Alipay. Previously, Taobao only had Alipay, but now with the introduction of WeChat, users have more choices.

This interconnection also opens a door for other future cooperation. In addition to the common payment tools, there are opportunities for open cooperation in marketing, supply chain, logistics services, technology, finance and other aspects. Wang Pengbo also said that this also set an example for more cooperation between payment tools and platforms in the future. "For example, will JD.com be able to connect to Alipay in the future? Or can WeChat, as a platform, connect to more payment tools? Can we expect to be able to withdraw cash to Cloud QuickPass after grabbing red envelopes in WeChat groups?" He further added that Taobao's introduction of WeChat payment will also "liberate" Alipay.

"Previously, the two parties had some vague agreements not to get involved in each other's business areas. As the two parties develop more independently, the incremental business that Alipay could not do before can also be promoted. It is expected that e-commerce business will gradually increase its share in Alipay's revenue."

In the future, what needs to be verified is not how many new users a new payment interface can attract, but whether the platforms can reach a long-term harmony in profit sharing. In addition, how the costs brought by the new payment channel are charged to merchants and whether the arrangements are appropriate also need to be seen in the future.

In short, although this update does not seem to generate direct market competition on the surface, it still brings a sample of benign change to the entire industry.

At least, leaving aside all the financial value and significance of the development of e-commerce, anything that can facilitate consumers is already a good thing, and it will undoubtedly win a wave of goodwill.