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Alibaba And Tencent Escalate Their Online Battle

Chinese online giants Alibaba and Tencent, who have gone toe-to-toe over everything from taxi rides to banking, appear to be escalating their battle once more, Tech in Asia reported.

The most recent move: Tencent’s hugely popular social media service WeChat has been cutting links between its mobile app and Alibaba’s payment and music services during the run-up to the Spring Festival holiday, which begins this year on Thursday, Feb. 19.

The most notable cutoff involves Alibaba’s Alipay payment service. On Monday (Feb. 2), Chinese-language news website Sina Tech reported that WeChat has shut down a link that let Alipay users send digital “red envelopes” — gifts of money during the Lunar New Year holiday — to friends on WeChat.

WeChat has its own digital payments service that has been struggling to gain ground on the dominant Alipay, and WeChat also offers a red envelope service. WeChat may hope that cutting off the Alipay link will push users to use WeChat’s own service instead.

While Tencent and Alibaba have been competing hard for re-envelope payments for several years, Tencent may have escalated the fight this year because it has launched its own online bank — several months ahead of a similar bank that Alibaba has been licensed to launch this year — and wants to press every advantage it can on the financial front.

WeChat has also shut down links that previously let users of two Alibaba music services, Xiami and Tiantian Dongting, share content from those apps directly with friends using WeChat. There doesn’t appear to be a similar head-to-head competition between Tencent and Alibaba for music apps, according to Tech in Asia, but the purpose may simply be to help boost everything connected with WeChat’s own service, which with 468 million active users is as dominant in online games and social networking as Alibaba is in e-commerce and payments.

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