Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE: BABA) is planning to offer its bargains service on rival Tencent Holdings Ltd’s (OTC: TCEHY) WeChat messaging platform. The move comes following the regulatory crackdown by China’s watchdog on internet business monopolies, Bloomberg reports.
- Alibaba planned to set up a Taobao Deals lite app on Tencent’s WeChat and invited some merchants to participate in a landmark move. Selling through the WeChat super-app implied payment acceptance via the WeChat Pay service.
- Tencent is yet to accept the listing of the Taobao Deals lite app. The WeChat evolved from a chatting platform to ride-hailing, online shopping, and payments on its platform with over a billion users.
- China’s antitrust watchdog has prioritized internet companies’ regulation with a heightened focus on the tech majors to eliminate monopolistic behaviors from alliances that compelled smaller rivals to forced exclusive arrangements and predatory pricing.
- Alibaba and Tencent have been at loggerheads despite their respective focus on online shopping, social media, and gaming.
- Alibaba’s deals app targeted the consumption needs of China’s smaller cities and towns beyond its Taobao and Tmall shopping platforms to eliminate competitors like Pinduoduo Inc (NASDAQ: PDD). The mobile monthly average users of Taobao Deals exceeded 100 million in 2020. Local media 36Kr reported the addition of a Taobao Deals mini program in the WeChat for a brief time in February.
- Chinese antitrust regulators recently throttled Jack Ma Ant’s $35 billion initial public offerings (IPO) upon Ma’s regulatory criticisms, followed by a probe into Ma’s flagship e-commerce corporation.
- Tencent was fined for not seeking approval on past deals, with its fintech businesses being a potential target for regulatory scrutiny.
- Price action: BABA shares traded higher by 2.92% at $233.55 on the last check Wednesday. TCEHY shares traded lower by 1.39% at $80.52.