Business     

Mobile Internet giants in e-commerce rivalry

Xinhua, August 6, 2013

• China's two Internet giants -- Sina Weibo and its rival Tencent WeChat -- have rolled out new products with more commercial functions, marking the escalation of competition in the Chinese mobile Internet market.

  The Twitter-like microblogging service Sina Weibo, which received 586 million U.S. dollars in investment from China's e-commerce giant Alibaba in April, launched its Taobao-friendly version on Monday. It allows users to log into the online shopping platform Taobao.com via a Weibo account, check prices, credibility and popularity, make payments and share with friends.

  Also on Monday, Tencent rolled out an iOS update to its popular talk-and-text app WeChat, featuring payment services, a games center and a sticker store in a bid to monetize the free app. A WeChat-customized subscriber identification module (SIM) card was also released in collaboration with telecom giant China Unicom.

  "The launch of commercial-oriented products of the two Internet giants mark the heating up of competition on the mobile Internet commerce market, and it heralds reforms in the e-commerce industry," said Cui Kai, senior analyst with Upperplus, a domestic Internet research and consulting firm.

  Since 2012, Sina Weibo has been marching with its commercialization push by taking a series of profit-making steps such as focused interactive advertising, social networking games, real-time search functions and e-commerce platforms.

  In its latest version for mobile users, Sina Weibo updated with similar bar-code-scanning function in late July, signaling its move towards mobile Internet commerce.

  Zhejiang-based online snack shop Bee & Cheery, one of the first business users to try the Taobao-friendly Sina Weibo, said the service contributed to over 50 percent of their online shop's total traffic on Monday.

  In the meantime, as WeChat gains national as well as global popularity, Tencent took its first commercial move to monetize WeChat in an attempt to cash in on its 400 million-plus user base.

  The updated WeChat has a centralized sticker store, allowing users to browse and purchase "premium" stickers and adds its first game to its new gaming center, as online games have contributed substantially to Tencent's business revenues through its instant messenger software QQ.,

  Tencent said more games are being tested with a total of 11 eventually expected to appear on the platform.

  Users of the updated WeChat will receive detailed links to products with price comparisons when scanning the bar code with their smart phones, and payment services are provided through Tencent's online payment platform Tenpay, a rival product of Alibaba's Alipay.

  However, product links on WeChat are confined to small e-commerce players such as Tencent B2C, Dangdang and Douban with no links to e-commerce giants Jingdong and Alibaba, which occupy over 65 percent of the B2C market.

  "This is a win-win cooperation between small e-commerce players and WeChat to improve business," said Cui.

  Alibaba Group Holding Ltd. said on July 31 that its online shopping sites are temporarily blocking sellers from subscribing to marketing and promotional apps linked with WeChat to ensure safe transactions for shoppers on Taobao and Tmall as consumers complained about "excessive" promotional messages on WeChat from sellers.

  "The new moves of the two giants not only signal escalating competition, but also have potential significant impact on other industries and people's daily work and life," said Lu Jingyu, a senior analyst with China's leading Internet industry research company iResearch.

  On Monday, Tencent also joined hands with China Unicom to launch the nation's first SIM card customized for WeChat, enabling mobile phone users to enjoy discounts and privilege services while using Tencent's WeChat application.

  "More cooperation can be expected in other niche markets, such as the online finance market and the online gaming market," said Jiang Qiping, secretary-general of the Center for Informatization Study under Chinese Academy of Social Sciences.

  China Merchants Bank took the lead in WeChat-based mobile banking by issuing its WeChat-based credit card customer service in late March and an updated version featuring comprehensive customer service and marketing for debit and credit cards on July 2.

  "The new WeChat's payment services bode more potential business opportunities for us thanks to the boom of online finance fueled by mobile Internet innovations," said Liu Jianjun, director of retail sales of the bank.

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