Tencent and Alibaba have always had fierce competition in the eCommerce space — usually with Alibaba taking the lead above its trailing counterpart. Now, it appears, Tencent has flipped sides and opened an online shop on Alibaba's Tmall marketplace as one of its newest merchant customers, Tech In Asia reported.
Earlier this month, Amazon announced it was pushing its expansion into China through Tmall. Located in Tmall, Amazon’s new offering is so far a limited number of product categories including imported food, women’s shoes, toys and kitchen equipment. Highlighted items on sale include Crayola crayons and LEGOs. For Tencent, it appears the company will focus on selling more of its electronics side of the business, like its Bluetooth speaker sets or branded tech hardware.
By signing on with Alibaba, Amazon — and now Tencent — have essentially become a merchant customer that will pay Alibaba a commission from each transaction. While Tencent and Alibaba have waged fierce competition against each other, Tencent has focused more toward the gaming and social messaging side with WeChat, whereas Alibaba has focused on growing its eCommerce side.
Tencent has also gone after Alibaba in the past year by teaming up with online retailer JD.com, another direct competitor of Alibaba. And through its WeChat app, Tencent created a payments option, which challenged Alibaba's Alipay. Even when it came to the Chinese New Year Red Envelope tradition, the two rivals squared off to sell the most "lucky money."
Still, despite the competition, this isn't the first time Tencent and Alibaba have come together under one venture. Alibaba and Tencent agreed in February to a rare truce in the taxicab industry and merge their two ridesharing apps to create one product to benefit both companies.