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Alibaba (NYSE:BABA) will reportedly allow payments through Tencent’s (OTCPK:TCEHY) WeChat app on its ecommerce platforms Taobao and Tmall.
The change is set to be effective in weeks, the Wall Street Journal reported, citing people familiar with the matter.
Alibaba (BABA) primarily used to push Alipay, WeChat’s rival, as its main payment method on its Chinese ecommerce platforms. Alipay was founded by Jack Ma, and is affiliated to BABA.
The company has also tested the payment tool, with a small pool of users since early this year, the report said, adding the tests showed that allowing access to WeChat Pay would enable Alibaba to acquire users, especially people from smaller cities.
WeChat currently has over 1.35 billion users, and is one of the major payment apps in China.
Chinese technology companies are being put under regulatory scrutiny, and are urged to put down their “walled gardens.” Walled gardens are often referred to an ecosystem that is closed and does not allow products from competitors to penetrate.
Last quarter, BABA’s finance chief, Toby Xu has said, that they are looking to continue to invest for growth in its core businesses while reducing losses in other business units through operating efficiency.
Alibaba (BABA) once China’s best contender to become a trillion-dollar company, has been facing competition from rivals such as PDD (PDD) and JD.com (JD).
Last week, China’s antitrust watchdog ended a three-year regulatory “rectification” process of Alibaba (BABA) and praised the internet giant for its compliance, after fining the company $2.8B in 2021 for monopolistic practices.
