Walmart Taps WeChat For Western Region Of China In A Blow To Alipay

In what is seen as a blow to Alipay, Walmart inked a deal with rival Tencent Holdings to use WeChat Pay, its popular payment app, in all of its stores in the western region of China.

Reuters, citing Walmart, said the move underscores a market in China that is dividing into either the Alibaba camp with its Alipay digital payment service or the Tencent camp with its WeChat payment app. Both companies have been pouring billions of dollars into the retail market since the beginning of 2017, aiming to dominate the mobile payment market. While Alipay is in the leading position, Reuters noted Tencent is closing in on it fast. Consumers in China typically have both apps on their mobile devices, but the backing of Walmart could help Tencent close in on Alipay further.

A Walmart spokeswoman told Reuters it had entered into a partnership with WeChat Pay and that it was a business decision aimed at improving the experience for the customers.  The Western region of China includes Sichuan, Yunnan and Gansu — which, while large, is less populated than the eastern part of China, noted the report. “In the future, Walmart will cooperate with more partners to provide payment solutions with more convenience and benefits,” the spokeswoman said in an email to Reuters. She said Walmart accepts different payment methods including cash, payment cards and mobile payments.

The deal with Walmart comes a few weeks after Tencent was able to hit the more than billion threshold in terms of the number of accounts. Earlier this month Pony Ma, the chief executive of Tencent, said the new accounts threshold was hit during the Chinese New Year celebrations last month. The figure notably refers to user accounts, not users — or monthly active users, which is generally the metric the firm refers to when talking about how many users it has. WeChat users, for example, often have more than one account (for personal vs professional use). This figure, however, is counting accounts — not users. Speaking specifically of accounts, however, the company reported annual growth in WeChat user accounts of 15.8 percent last September.