Ten years ago, Alibaba suspended third-party application services related to WeChat, and Taobao no longer directly redirected to WeChat. Jack Ma and Pony Ma personally built a &#34;Berlin Wall&#34;, with millions of Taobao and WeChat users on either side, unable to directly interact with each other.
Ten years later, the two largest internet giants in China are working hard to tear down the wall and have staged a historic reconciliation.
On September 25th, Alibaba's Tmall Marketing and Tencent Advertising further deepened their cooperation. High-quality advertising traffic from WeChat Video Accounts, Moments, Mini Programs, and more will be delivered through Tmall Marketing's UD Effect, allowing direct redirection to Tmall and Taobao stores, product details, and Tmall live streaming rooms.
At the same time, Tencent Advertising announced that the two parties will also deeply integrate in terms of complementary user groups and system co-construction, meeting different business objectives of merchants in the three major operation centers: stores, live streaming, and content.
It is reported that the goal of this cooperation between Tmall Marketing and Tencent Advertising is to prepare for the &#34;Double 11&#34; shopping festival. They will jointly launch the &#34;Double 11 Super Explosion Plan&#34; and invest billions of yuan in subsidies to achieve the goal of driving traffic to stores and promoting transactions.
As one of Tencent's core businesses, this also means that Tencent is opening up its core traffic resources to Alibaba. The dismantling of the wall between Alibaba and Tencent has taken a huge step forward.
For Alibaba and Tencent today, the benefits of tearing down the wall outweigh the drawbacks.
Bai Wenxi, Chief Economist of IPG China, analyzed that Tencent has a huge user base and social media platforms, while Alibaba has a strong e-commerce and payment platform. Through cooperation, both parties can achieve a win-win situation. &#34;Tencent Advertising can redirect to Taobao, bringing its own traffic to Taobao and increasing its advertising revenue. Taobao, on the other hand, can gain more potential consumers and increase sales opportunities by importing Tencent's traffic.&#34;
This is particularly tempting for Alibaba this year.
Looking at the current domestic e-commerce landscape, competition is becoming increasingly fierce. JD.com dominates the high-end market, Pinduoduo targets lower-tier cities, and Douyin leads in live streaming. WeChat, as a super traffic pool, had a combined monthly active account number of 1.327 billion for WeChat and Weixin as of June 30, 2023, firmly sitting on the throne of the nation's top social app.
Moreover, this year Alibaba announced its return to Taobao, and the Taotian Group proposed three major transformative measures: &#34;user-first,&#34; &#34;ecosystem prosperity,&#34; and &#34;technology-driven,&#34; providing support to small and medium-sized merchants through traffic support and platform upgrades. Due to the increased willingness of merchants to invest in advertising, the Taotian Group's customer management revenue from April to June this year reached 79.66 billion yuan, a year-on-year increase of 10%.
Alibaba's e-commerce landscape will also become Tencent's new gold mine. In the second quarter, Tencent's advertising business achieved revenue of 25 billion yuan, a year-on-year increase of 34%. Among them, Video Accounts contributed more than 3 billion yuan. During the earnings call, Tencent stated that it will gradually increase the proportion of advertising on WeChat Video Accounts, saying that &#34;using the infrastructure of Video Accounts, Mini Programs, and more can create opportunities to double advertising revenue.&#34;
Industry insiders have expressed that the Chinese market is too large, with significant differences in consumer classes and habits. It is simply impossible for one company to achieve monopolistic dominance. The previous isolation between Alibaba and Tencent resulted in limited growth and allowed Pinduoduo and Douyin to rise.
Now Alibaba and Tencent are collaborating to achieve as much coverage as possible in order to compete for more traffic. &#34;In addition, based on open cooperation, data will also be interconnected, allowing both parties to obtain more accurate 'user profiles' and recommend their respective products more accurately, thereby improving efficiency and effectiveness.&#34;
In fact, starting in 2020, the two giants ended the &#34;blocking war&#34; and began tearing down walls. In the second half of 2020, advertisements for Fliggy started appearing on QQ Music. Since 2021, advertisements for Tencent Video, Tencent News, and other apps, as well as Taobao links in WeChat, can directly jump to Taobao. There were rumors in the market that Alibaba and Tencent were considering opening up their ecosystems to each other, and the stock prices of the two giants rose more than 3% on the same day.
Behind this is the realization that with the anti-monopoly storm in the Internet industry in 2021, as well as the rise of multiple Internet giants such as JD.com, Douyin, Kuaishou, and Pinduoduo, who are competing with Alibaba and Tencent, Jack Ma and Pony Ma, the original Internet pioneers who were busy fighting each other, are increasingly aware that the era of separatism and wild growth is over, and the Internet industry has entered the era of &#34;fighting for market share&#34;. Only through open ecosystems, interconnection, and mutual assistance can they explore new boundaries of development and achieve breakthroughs in revenue.
Freedom, openness, sharing, and decentralization are the essence of the Internet.
Now, it's just a return to the original intention for Jack Ma and Pony Ma after going around in circles.
This kind of interconnection is a further step towards Pony Ma's vision of creating a &#34;borderless, open and sharing Internet ecosystem&#34; and Jack Ma's prophecy that &#34;the future Internet will have no boundaries&#34;.
This is a grand movement to tear down the walls in the industry, and besides Alibaba and Tencent, all major Internet companies are involved.
Since the end of 2021, there have been strategic collaborations between Meituan and Kuaishou, with Meituan launching its mini-program on Kuaishou, and collaborations between Tencent Video and Douyin, among others.
Bai Wenxi believes that the collaboration between Alibaba and Tencent better reflects the trend of openness and interconnection in the Internet industry. All Internet companies are striving to break down the &#34;walls&#34; between each other and achieve interconnection between different platforms. Through cooperation and innovation, Internet companies can develop more innovative products and services and improve economic efficiency.
For the industry, after the rampant expansion and separatism in the early days of the Internet industry, a new Internet community has emerged.
In an increasingly open market environment, Pony Ma, Zhang Yiming, Liu Qiangdong, Wang Xing, and others must adapt to new rules and shake hands in order to defend and create more benefits.

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Ali Tencent Century's "Reconciliation"