The Chinese tech giant Alibaba has confirmed that it finally plans to integrate the digital payment service WeChat Pay into its flagship e-commerce platforms, bringing to an end a decadelong cold war between two of China’s internet titans.

The e-commerce platforms Taobao and Tmall issued a call for public opinions on allowing payments via WeChat Pay — owned by Alibaba’s great rival, Tencent — on Wednesday. The statement added that the move was designed to enhance consumers’ shopping experience.

The new payment option has yet to become available on the Taobao website, but a customer service agent told Sixth Tone that the platform is currently inviting merchants to add WeChat Pay in batches and that the service would gradually become available via more stores.

The move is the latest signal that China’s tech giants are moving away from their previous strategy of creating “walled gardens” around their platforms, as Chinese authorities increasingly clamp down on monopolistic practices online.

For over a decade, the lack of access to WeChat Pay on Taobao and Tmall meant that shoppers on the platforms overwhelmingly made payments via Alipay, which is owned by Alibaba affiliate Ant Group.

The restriction helped Alipay establish a clear lead over WeChat Pay in China’s digital wallet market. According to the market intelligence firm Forward Industry Research Institute, Alipay processed transactions worth 118 trillion yuan ($16.6 trillion) in the third quarter of 2023, while WeChat Pay handled 68 trillion yuan.

But in a statement also issued on Wednesday, Alipay put a positive spin on the announcement that threatens to end its dominance of the Alibaba ecosystem, insisting that it supported an open internet.

“We believe in an open ecosystem where innovation thrives, and we will continue to work closely with Taobao and Tmall to drive technological advancements,” the company said.

The news became the top trending topic on the microblogging platform Weibo within hours of Taobao’s statement being released, with many users praising the move. “It’s a great move, no more transferring funds back and forth,” one Weibo influencer with over 3 million followers wrote. “When the two platforms weren’t integrated, I spent a fortune on withdrawal fees.”

WeChat Pay charges users a 0.1% fee every time they transfer funds out of their wallets, meaning each withdrawal of 1,000 yuan costs users 1 yuan.

Alibaba and Tencent have been locked in fierce competition for years, with both groups restricting users’ access to each other’s platforms.

After Tencent launched WeChat Pay in 2013, Alibaba chose not to integrate it into its e-commerce ecosystem, despite the digital wallet having hundreds of millions of users.

Tencent hit back by restricting advertising for Taobao stores on its wildly popular social app WeChat in 2013. In both cases, the companies justified their actions as being designed to safeguard their platforms’ security and user experience.

But Chinese authorities have tightened internet regulations over recent years, putting pressure on tech firms to tear down their walled gardens.

In 2021, Zhao Zhiguo, a spokesperson for China’s Ministry of Industry and Information Technology, said in a press conference that the government planned to focus on ensuring online platforms were intercompatible, to ensure users could freely access online services.

Soon after, cracks started to appear in the wall between Taobao and WeChat. In September 2021, WeChat stopped blocking links to Taobao stores, ending the era of users needing to endlessly copy-paste URLs from one platform to another.

The government has continued to ramp up its efforts this year. New provisions against unfair online competition came into effect on Sept. 1, which explicitly define moves to block or uninstall another company’s online service without good reason as unfair competition.

Pan Helin, an economist, told domestic media outlet The Paper that Taobao’s adoption of WeChat Pay will ultimately benefit Taobao, as it will gain access to WeChat Pay’s user base.

“It’s likely that under the leadership of Taobao and WeChat Pay, cooperation between different platforms and payment companies will become more frequent and closer,” Pan said. “It’s good for business development and promoting consumption.”

(Header image: VCG)