--- title: "Alibaba's Taobao integrates WeChat Pay, breaking down the 'walled garden' between Alibaba and Tencent" type: "Topics" locale: "zh-HK" url: "https://longbridge.com/zh-HK/topics/23673177.md" description: "Source | Dongge's E-commerce Interpretation Author | Jinshan Alibaba and Tencent are once again interconnected. On September 4, Taobao Tmall announced that in order to enhance the shopping experience for consumers, Taobao plans to add WeChat Pay as a payment option. After the conclusion of this opinion collection, platform rules will be adjusted accordingly. It is reported that this adjustment will cover all Taobao and Tmall merchants. Alipay responded to Taobao's addition of a new payment method, stating, 'Openness creates a greater future.' Who benefits from Taobao's integration of WeChat Pay? Taobao seeks new user growth. According to reports, Taobao is the more proactive party in this initiative..." datetime: "2024-09-05T10:07:04.000Z" locales: - [en](https://longbridge.com/en/topics/23673177.md) - [zh-CN](https://longbridge.com/zh-CN/topics/23673177.md) - [zh-HK](https://longbridge.com/zh-HK/topics/23673177.md) author: "[东哥解读电商](https://longbridge.com/zh-HK/profiles/2290632.md)" --- > 支持的語言: [English](https://longbridge.com/en/topics/23673177.md) | [简体中文](https://longbridge.com/zh-CN/topics/23673177.md) # Alibaba's Taobao integrates WeChat Pay, breaking down the 'walled garden' between Alibaba and Tencent Source | Dongge's E-commerce Insights Author | Jin Shan Alibaba and Tencent reconnect. On September 4, Taobao and Tmall announced that to enhance the shopping experience, Taobao plans to add WeChat Pay as a payment option. After the feedback collection period, platform rules will be adjusted. This change will apply to all Taobao and Tmall merchants. Alipay responded to Taobao's new payment method, stating, "Openness creates a bigger future." Who benefits from Taobao integrating WeChat Pay?   **Taobao Seeks New User Growth** Taobao is the more proactive party in this move. In Alibaba's Q1 FY2025 earnings report, Taotian Group faced growth pressure and urgently needs new growth drivers. Taotian Group's revenue was RMB 113.373 billion, down 1% YoY; adjusted EBITA was RMB 48.810 billion, down 1% YoY. Customer management revenue (ads and commissions) grew 1% YoY, mainly due to high single-digit growth in online GMV, partially offset by a decline in monetization rate. The drop in monetization rate was primarily due to the increasing proportion of GMV from emerging models with lower current monetization rates within Taotian Group. With WeChat Pay's support, Taobao can tap into markets previously unreached by Alipay, especially in counties and rural areas. A 2020 report by WeChat and Renmin University showed that WeChat Pay was the preferred payment method for 83% of county users and 78% of rural users, higher than the 76% of urban users. Taobao's integration will also boost WeChat Pay's revenue. With nearly RMB 8 trillion in annual transactions, Taobao is the largest merchant on WeChat Pay. Taotian plans to increase investments and use marketing strategies and subsidies to encourage these users to download or re-download the Taobao app. Merchants may not feel much impact, as Taobao and Tmall have already started charging a basic software service fee. On July 26, Taobao announced a 0.6% basic software service fee starting September 1, 2024, matching WeChat Pay's rate. After years of development, mobile payment penetration has plateaued. The benefits of Taobao and Tencent's reconnection may be limited. Whether Taobao can return to growth depends on consumer spending. According to National Bureau of Statistics data, Q2 2024 retail sales fell 1.8% YoY to RMB 12.1047 trillion.   **Increased Pressure on Alipay** Will WeChat Pay's integration challenge Alipay's dominance? Alipay no longer relies solely on Taotian Group for traffic. Ant Group's 2020 IPO filing showed that Taotian accounted for only about 6% of Alipay's total payment volume. Alipay has expanded into offline payments, credit card repayments, cross-border transactions, and more. Jack Ma once said, "If banks don't change, we'll change banks." After Ant Group's failed IPO, Alipay began exploring new commercialization paths. In 2020, Alipay added lifestyle services, mirroring Meituan's features. In 2022, it shifted to content, adding a video section. In 2023, it launched "Take a Look" for short videos and began monetizing ads during events like the Five Fortune campaign. In April, Alipay reported a 4x increase in active advertisers and a 14x rise in live streams over the past year. With 1 billion users, Alipay is accelerating commercialization. WeChat Pay's integration adds pressure, but offline and overseas markets offer growth potential.   **From Rivals to Partners** Alipay launched in 2003, leveraging Taobao's ecosystem to dominate online payments. WeChat Pay debuted in 2013. That year, Taobao links in WeChat redirected to Taobao's download page, prompting Taobao to create "Tao Codes." In 2014, WeChat Pay's Lunar New Year red packet campaign attracted over 30 million users to link bank cards in days—matching Alipay's decade-long effort. A fierce payment war followed, with subsidies for ride-hailing, offline payments, and dining. Eventually, the two captured 94% of the market, with WeChat Pay dominating offline. In 2021, China's MIIT mandated unblocking links between platforms. The "Alibaba ecosystem" and "Tencent ecosystem" began testing interoperability. Now, the transition is complete. On August 30, China's State Administration for Market Regulation announced Alibaba's three-year rectification was complete. In 2021, Alibaba was penalized for monopolistic practices like "pick one of two." Alibaba responded: "This marks a new beginning. We'll focus on innovation, compliance, and technology to drive healthy platform economy growth." On the same day, Tencent-backed Meituan also integrated Alipay. Meituan Food Delivery and Meituan Hotels launched Alipay mini-programs with exclusive coupons. Meituan Group Buying will follow soon. Payments complete the commerce loop. With slowing market growth and stable competition, Alibaba and Tencent must also contend with Pinduoduo, Douyin, and Kuaishou. Open ecosystems can unlock synergies and new growth. References: 1\. China Entrepreneur: Alibaba and Tencent Compromise 2\. LatePost: Taobao Adds WeChat Pay, "Interconnection" for Efficiency 3\. Jiemian: Alipay's Commercialization Quest 4\. Lanjinger: Monetizing Alipay's 1B Traffic 5\. 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