Business / Staff Gadgets

Alibaba, Tencent clash in cyberspace

By He Wei in Shanghai (China Daily) Updated: 2013-08-02 07:26

China's lnternet titans have declared a "virtual" war on each other's marketing services for online vendors, as each seeks to capitalize on its respective mobile Internet system.

E-commerce giant Alibaba Group Holding Ltd has announced it will block marketing messages sent from the WeChat platform, a mobile social networking application developed by Tencent Holdings Ltd, the nation's largest Internet company by market capitalization.

It was Alibaba's latest counter-offensive against Tencent, which a week ago began to ban public accounts that were mostly registered by Alibaba vendors, who were disseminating commercial advertisements via WeChat.

"Alibaba has temporarily ceased WeChat-related services that distribute commercial ads to its users, because such practices are disruptive to market order and have a negative impact on our customers," according to an Alibaba statement sent to China Daily on Thursday.

Alibaba maintains these services tend to redirect buyers to platforms other than the Alibaba payment system, where a lack of supervision may lead to potential security loopholes.

The decision followed a restriction imposed by WeChat on merchandise on Taobao (which is the customer-to-customer business unit of Alibaba) to protect user experience, the statement added.

The battle intensified after Tencent on Friday shut down corporate accounts registered by Alibaba merchants, who utilize WeChat to reach more than 300 million users.

Tencent has long positioned WeChat as part messaging service, part social network, repeatedly claiming that its overriding goal is not to serve marketing purposes.

Most social networking sites have become critical focal points for brands to interact with users, according to Calvin Chan, general manager at Beijing-based AdMaster, which monitors online advertising.

"For instance, about 28 percent of active users search for product information via Sina Weibo, and 43 percent of them tend to share their preferred brands online. This fast-growing landscape should not be ignored," he said.

Meanwhile, most are poised to form a seamless online payment system to secure users.

Apart from Alibaba's Alipay, Tencent has teamed up with third-party payment platform TenPay to tie its service to WeChat.

Because both companies stand at the forefront of mobile Internet developments, Alibaba and Tencent are competing for a grip on Web traffic that will allow them to retain users and increase their loyalty, said Dong Xu, a senior analyst at Analysys International, a Beijing-based consultancy.

"There tends to be more homogeneity when content is displayed via terminals rather than on PCs, and you see the boundaries of marketing and e-commerce start to blur.

"So both are fighting for a bigger slice for their own ecosystem, especially the payment system," Dong said.

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