What to look out for in 2014
Over the past few months it’s become clear that Tencent and Alibaba are butting heads over who will get access to Chinese consumers’ wallets. Alibaba has access to the de-facto channels of consumer purchases – namely, Tmall and Taobao. But Tencent has users’ attention with WeChat.
A high-profile catfight emerged in late 2013 between the two tech giants. It began when Alibaba revoked the Taobao search feature , which was an add-on service rolled out earlier in the year, from WeChat days before the v5.0 update, along with other WeChat channels on its e-commerce sites. Tencent later retaliated by blocking Laiwang invites on WeChat. Even Sina Weibo was dragged into the mess briefly when it temporarily suspended content sharing on WeChat, though the feature was brought back quickly. According to a report from Barron's of the 20th December 2013, "Wedge Partners analyst Juan Lin thinks Sina is doing so only because users are losing interest in Weibo:
We think Weibo reopened the content sharing function to Wechat due to the pressure for Weibo to grow traffic. Due to the lowered quality of Weibo content and competition, Weibo platform is no longer as attractive to users as the primary social platform. The real competition, however, is between Tencent and Alibaba.Increasing number of Taobao merchants now use Wechat as a new marketing channel, and more and more Wechat users are now making purchases on Taobao’s mobile app directly, through the links shared in Wechat.Users can make direct payments on Wechat through Tencent’s own payment tool Tenpay.With the high penetration of Wechat (over 600 million users), Tencent may once again directly compete against Alibaba with its existing ecommerce business.
It’s worth noting that although Tencent and Alibaba have clashed over e-commerce, WeChat’s still in the early stages of its monetization, and it’s not yet crystal clear how it big its influence over m-commerce will be.
Meanwhile, Alibaba remains the uncontested master of all-things e-commerce in China, and for the time being, m-commerce as well. It brought inover $5 billion in sales revenues in a single day in November on China’s equivalent of Cyber Monday,21 percent of which came through purchases made on mobile devices.
As for what will come next year, expect Tencent to throw in even more features on WeChat that drive revenues – more games, more shopping, more paid app upgrades, and more online-to-offline payments via QR codes. Expect Alibaba to develop its Alipay Wallet mobile app by adding more offline payment options, and perhaps by adding some social features. 2014 and 2015 will be pivotal years for these two firms as WeChat tightens its grip over users’ mobile habits, and Alibaba tries to find ways to avoid getting losing revenues in the process.
Source: TECHINASIA
