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Alibaba to Integrate Tencent’s WeChat Pay Across Its E-Commerce Platforms

Alibaba to Integrate Tencent’s WeChat Pay Across Its E-Commerce Platforms

Alibaba which is the biggest tech business in China, has announced that Taobao and Tmall which are the two of the company’s most recognized e-commerce platforms, would now allow transactions made with WeChat Pay. Alibaba has changed to a more collaborative strategy by granting WeChat Pay access for the first time with this move.

Removing the Barriers

Alibaba to Integrate Tencent’s WeChat Pay Across Its E-Commerce Platforms

Image Source: scmp.com

Alibaba made this strategic step because the firm wanted to spur development in the E-commerce sector of China. Alibaba is searching for innovative ways so that they can increase their engagement with customers along with the market share, and, they are specifically doing it in countries that are developing. This crucial step was taken because the rival companies were becoming obstacles and they were facing declining customer demand.

Increasing Growth Despite Competition

The Chief Executive Officer of Alibaba, Eddie Wu has declared his intention to restart Taobao as well as Tmall’s development by the second half of the company’s 2025 financial year. It is assumed that The Payment service WeChat Pay, which has more than 1.3 billion users around the world might help Alibaba increase its share of the market. Most of the WeChat Pay users are from China so it would benefit Alibaba. This will be especially beneficial in areas where WeChat Pay is extensively utilized.

WeChat Pay has long been available on other platforms such as JD.com, thus Alibaba’s action helps them stay competitive in a market that is changing quickly.

Cooperation and Regulatory Pressure

The regulatory pressure coming from the Chinese authorities, who have pushed internet corporations to dismantle their “walled gardens,” is also relevant to this development. In the past, these gardens kept rivals from using each other’s platforms’ functions. In reaction to these laws, two of China’s biggest tech companies, Tencent and Alibaba, have begun to relax these limits during the past couple of years.

WeChat

Apple opens store on China’s WeChat platform

According to Tencent, Apple has recently launched an online store on the popular Chinese app WeChat.

The store has been integrated into WeChat’s mini-programs, which are small applications within the platform that offer various services such as e-commerce, finance, and transportation.

WeChat
Image Source: thehindu.com

Apple’s store on WeChat will feature a range of its products, including iPhones, iPads, Apple Watches, and Macs. This is not the first time Apple has established a presence on a Chinese platform, as it already operates a store on Alibaba’s Tmall e-commerce platform, which is a competitor of Tencent.

In addition to this, Apple also experimented with live commerce in China earlier this year, attempting to sell its products through interactive live streaming.

China is a significant market for Apple outside of the United States. According to research firm Counterpoint, the iPhone 13 series dominated the top three spots in the list of best-selling phones in China in 2022.

Despite a decline in China’s smartphone market in the first quarter of 2023, Apple has managed to maintain its position as the leading handset vendor in the country, capturing a 20% market share. This represents a 2% increase compared to the same period in the previous year, as highlighted in a report by Counterpoint.

However, Apple has been actively working to diversify its manufacturing operations by reducing its reliance on China. JP Morgan analysts reported last year that the company plans to shift 25% of its iPhone production to India and 20% of its iPad and Apple Watch production to Vietnam by 2025.

Also Read: Binance chief strategy officer Patrick Hillmann steps down

This strategic move aims to mitigate risks associated with overdependence on a single manufacturing location and take advantage of the benefits offered by other countries in terms of cost, logistics, and supply chain resilience.

In summary, Apple has expanded its presence in the Chinese market by launching an online store on WeChat, one of China’s most popular apps. This move follows Apple’s existing store on Alibaba’s Tmall platform and its previous foray into live commerce.

While China remains a crucial market for Apple, the company is actively working to diversify its manufacturing operations by gradually shifting production to countries like India and Vietnam. These efforts align with Apple’s strategy to reduce its dependence on a single manufacturing base and leverage the advantages offered by different regions.

The launch of Apple’s online store on WeChat demonstrates the company’s commitment to reaching Chinese consumers through diverse channels and platforms

Trump

Trump bans Chinese apps like Tik Tok and WeChat to safeguard America’s assets

To assure national security and prevent the collection of data and personal information of Americans by the Chinese companies, Trump finally announced the ban of a few most common Chinese apps. According to the announcement on Thursday, the Chinese video-sharing app, Tik Tok, and another Chinese app WeChat will be banned in the U.S.

Trump

Imposing a ban within 45 days

In response to the miserable and horrendous consequences of the pandemic which spread from the Wuhan city of China, many nations have turned against this Asian country. A month ago, India banned the Chinese apps and now Trump is making efforts to stop the intervention of these “untrusted” Chinese companies. Trump further said that it is an effort to keep the U.S. digital network safe from “significant threats” as Tik Tok is charged with data collection. The tension between Washington and Beijing keeps on increasing and will become more intensified in the upcoming 45 days.

Trump imposed the ban on these Chinese apps under the International Emergency Economic Powers Act. This law can be used in case of any unusual and extraordinary threat thus giving power to the president of the United States to regulate international commerce. Mike Pompeo, US Secretary of State, mentioned that the US will be focusing on the expansion of a clean network thus preventing the Chinese telecom companies to fetch sensitive information as well. Wilbur Ross, US Commerce Secretary, will be in charge of identifying the transactions after the order comes into effect from mid-September.

Tension keeps on increasing 

Not only the American government has ordered China to vacate its consulate from Houston, Texas but also the Chinese government has reciprocated by ordering the U.S. to vacate from the southwestern city of Chengdu. James Lewis, a technology expert based on Washington in response to the imposed ban said that it will demolish the digital world between the U.S. and China. And, the American government should be very cautious as China will retaliate and not sit silently.

Trump also mentioned that the operation of Tik Tok in the U.S. will be sold to Microsoft is the U.S. government gets a part of the sales price. But, no matter what the Chinese apps will be banned in the U.S. on 15th September 2020.

Expansion of the Clean Network

The clean network is a program under Trump’s administration to protect the privacy of American citizens and prevent leaking of sensitive information about the nation. The program clearly states that it guards the nation’s important information against intruders like the Chinese Communist Party (CCP). On 5th August 2020, five new lines of effort were announced by the United States.

  • Clean Carrier: This new effort was to ensure that there is no relation or connection between the People’s Republic of China and the U.S. telecommunications network. It is for the safety of the nation that those companies should not carry any kind of telecommunication services to and from the nation.
  • Clean Store: This step was taken to eradicate the untrusted Chinese application from the U.S. mobile app store.
  • Clean Apps: The trusted apps should be removed from Huawei’s app store and also prevent it from pre-installing in the smartphone.
  • Clean Cloud: This is one of the most important new installations in the Clean Network as sensitive information about the vaccines and researches regarding COVID-19 are stored on cloud-based systems.
  • Clean Cable: The U.S. will work with foreign partners to make sure the undersea cables are not compromised.

The outrage of Tik Tok lovers

But apart from ensuring the safety of the U.S. citizens, the ban of Tik Tok has not been taken positively. There are around 100 million Americans who use Tik Tok and they have voiced against banning the app. But, to prevent theft of information that can destroy a nation, it’s high time to take a big step against China.