The Great Reconciliation of the Century: Taobao Can Now Buy Traffic from WeChat

Recently, Alimama and Tencent Advertising officially announced their cooperation. Taobao merchants can use Alimama's advertising system to distribute traffic to WeChat video accounts, Moments, mini programs and other ecosystems. This news has aroused heated discussions among industry insiders, because it means that the interconnection between Internet giants has made new progress. Let's take a look at the interpretation of this article.

Before the arrival of Double Eleven this year, Alibaba and Tencent gave the outside world a surprise.

Recently, Alimama and Tencent Advertising officially announced their cooperation to realize the full direct connection of Taobao and WeChat advertising traffic and launch the "Double 11 Super Explosion" plan. In simple terms, Taobao merchants can use Alimama's advertising system to deliver traffic to WeChat Video Account, Moments, Mini Programs and other ecosystems.

This also reveals a signal that the decade-long "blockade war" between Taobao and WeChat is finally coming to an end.

In the competition over the past years, Alibaba and Tencent have tried to defeat each other many times. Since 2013, Taobao and WeChat have cut off links with each other, and the competition between the two sides has intensified. In 2021, the Ministry of Industry and Information Technology stepped in to rectify the blocking of external links, and Taobao and WeChat were forced to break the ice. Today, both sides have chosen to actively open up, which can be said to be a time of change and reform.

Facts have proven that neither Taobao nor WeChat can eat up the other. Instead of continuing to fight against each other, it is better to work together and share the cake. In addition, there are few businesses in which Tencent and Alibaba have substantial conflicts. Cooperation may be the beginning of a win-win situation.

1. The era of mutual benefit and win-win has arrived

To a certain extent, Alibaba and Tencent now have a mutually needing relationship.

Ten years ago, Taobao was the absolute leader in the e-commerce industry, with no rivals. According to iResearch, in 2013, Taobao's e-commerce transaction volume reached 441 billion yuan, more than three times that of the second-ranked JD.com, completely crushing all other e-commerce platforms on the market.

But today, although Taobao is still the largest e-commerce giant in China, it is surrounded by powerful competitors. Financial report data shows that in the quarter ending December 31, 2022, the GMV of physical goods on Taobao and Tmall (excluding unpaid orders) decreased by a single digit year-on-year, with the main reasons mentioned as reduced consumer demand and continued competition.

During the same period, live streaming e-commerce represented by Douyin and Kuaishou, and low-end e-commerce represented by Pinduoduo, all achieved rapid growth in total transaction volume.

Under the pressure from old rival JD.com and new rivals Douyin, Kuaishou and Pinduoduo, Taobao is under a lot of pressure. In addition, after Alibaba adjusted its organizational structure, Ele.me, which belongs to the local life section, has nothing to do with Taobao, so Taobao's e-commerce share will naturally be affected.

Looking at the entire Internet industry, WeChat, a huge traffic pool, cannot be ignored. According to the financial report, as of the end of June 2023, the combined monthly active accounts of WeChat and WeChat reached 1.327 billion, covering almost the entire population of China.

In this era of advertising contraction, Tencent's advertising business, which is responsible for monetizing WeChat traffic, also has a greater need to increase revenue.

In terms of traffic monetization efficiency, Tencent Advertising is still challenged by ByteDance, which has advertising revenue of 200 billion yuan a year.

In the past few years, Tencent, as a shareholder, would join forces with JD.com and Pinduoduo to squeeze Taobao's living space. But now that Tencent has "cleared out" its stake in JD.com and may continue to reduce its stake in Pinduoduo in the future, the competitive relationship between Tencent and Alibaba has been weakening.

At this point in time, it is not difficult to understand why Alibaba and Tencent are rushing in both directions.

2. The two giants "blocked" each other and refused to give in to each other

"The furthest distance in the world is that you are on Taobao and I am on WeChat." This statement has been true for a long time.

The fuse for the mutual ban between Alibaba and Tencent was caused by network security issues. In early 2013, Alibaba received some user feedback on security issues. After investigation, it was found that they were all standard phishing websites that forged Taobao pages and stole user privacy information. But at that time, WeChat did not have the function of querying the main domain name of the web page, and users on WeChat could not distinguish between the real Taobao page and the phishing page.

Therefore, Alibaba launched the "Cuckoo Project" internally on the grounds that WeChat had security vulnerabilities. It did not block WeChat access, but if a user opened a Taobao link in WeChat, they would be directed to the download page of the Taobao APP, and the shopping behavior would be forced to terminate.

But from Tencent's perspective, Taobao's ban was a forced one, which damaged users' communication experience. The act of diverting WeChat users to Taobao was tantamount to fleecing the platform, so Tencent quickly fought back.

Tencent directly blocked Taobao shopping sharing links and download pages on WeChat. If you click on a Taobao link, it will show: "The Taobao website you visited has been blocked. If you want to browse, you can long press the website to copy it and use the browser to access it." It also blocked WeChat public accounts and mini-programs for Taobao. Some netizens have calculated that if you want to share Taobao products with WeChat friends, you need to go through 5 steps.

The war between the two sides gradually escalated, evolving from a conflict between Taobao and WeChat into a systematic competition between the two giants. In February 2014, Alipay closed the payment interface for WeChat merchants. In 2015, after Alipay launched the red envelope function, it was immediately blocked by Tencent and could not be shared on WeChat or QQ.

This long-lasting battle between the two giants has attracted many different opinions, and each has its own supporters. But what remains unchanged is that the giants all want to seize the traffic entry point and realize the closed loop of their own traffic monetization.

3. Start breaking the ice and be careful

The turning point occurred in 2021. After eight years of mutual blocking, Taobao and WeChat opened a "gap" for communication.

In September of that year, the Ministry of Industry and Information Technology held an "Administrative Guidance Meeting on Blocking URL Links", with participating companies including Alibaba, Tencent and other giants. The three compliance standards proposed at the meeting required all platforms to lift the blocking of URL links in accordance with the standards.

So WeChat took the first step on September 17. Taobao links can be forwarded to WeChat, but to open the link, one still needs to go through access reminders, user login and other steps.

At the end of November, WeChat entered the second phase of interconnection and announced updated external link management measures, including "direct access to external links in point-to-point chat scenarios" and "a trial of opening direct access to e-commerce external links in group chat scenarios". In other words, links on the Taobao platform can be opened directly without a second confirmation.

Compared with the tortuous sharing model in the past, the external links at this stage do not need to jump, and the steps are simplified. It can be seen that WeChat and Taobao have indeed relaxed their restrictions on each other. However, it should be recognized that the cooperation between the two parties is still very superficial, and Taobao is still not welcome in the WeChat ecosystem.

Taobao links can only be presented in the form of "text + link" on WeChat, and sometimes they are folded due to length issues. At the same time, WeChat has shown a strict regulatory attitude, saying that it will control the distribution of external links from the perspective of user safety.

In comparison, JD.com and Pinduoduo can obtain WeChat's API permissions and present themselves in the form of mini-programs and small cards, as well as partial content such as product names and details, making them much more user-friendly than Taobao.

Taobao on the left/JD.com and Pinduoduo on the right

If we say that the cooperation between Alibaba and Tencent in 2021 was more based on the requirements of relevant departments and the passive lifting of external link blocking; then the reason behind their choice to actively cooperate now is that they see more prospects for win-win results.

This is a memorable moment as the Internet truly realizes the vision of interconnection and interoperability.

Author: Chen Yan; Editor: Dafeng

Source public account: Zinc Finance (ID: xincaijing), a recorder of new business and promoter of new economy.