Alibaba services such as food delivery platform Ele.me and video streaming site Youku Tudou now accept payment through Tencent’s WeChat super app. Other apps, including that of supermarket chain Freshippo, have also applied for WeChat Pay support, according to local media.
The change of heart comes amid Beijing’s crackdown on big tech companies, putting them under pressure to change some of the anticompetitive practices that had helped power their growth.
Most Alibaba services had not accepted WeChat Pay before the switch, while Tencent had blocked searches via WeChat “mini programs” so that Alibaba services would not appear. Though Alibaba’s Taobao online marketplace remains shut out of WeChat, an industry insider said “it’s only a matter of time” before the services fully open up to each other.
Tencent last month began letting users link to rivals’ content on WeChat, and on Sept 30, both Tencent and Alibaba said they would add state-owned UnionPay as a payment option.
Regulators had recently warned the tech titans against shutting out external services.
Blocking links without justifiable reason “affects user experience, damages user rights, and disrupts market order,” Zhao Zhiguo, spokesperson from the Ministry of Industry and Information Technology, told reporters in mid-September.
In the event there is no visible improvement, the ministry will take measures authorised by the law, Zhao added. Alibaba and Tencent took the directive to heart and took steps to comply.
The next flashpoint will be how Tencent treats ByteDance, the developer of the popular short video app TikTok. The two sides are bitter rivals in the streaming and social media markets. It appears that Tencent has yet to lift WeChat’s policy of blocking links to Douyin, China’s version of TikTok.
A reversal of that policy would be a boon for Douyin. But Tencent risks opening the door to a second ByteDance by doing so. The shift in the walled garden strategy symbolises the imminent close to an internet era dominated by Tencent and Alibaba.