The full integration of WeChat Pay on Taobao marks a new stage of "Internet Plus"-related giants' "interconnection and interoperability".

On Wednesday, September 4th, Jiemian News cited an insider report that Taobao is planning to fully introduce WeChat Pay. In response to this news, Taobao Tmall later issued an announcement stating that Taobao plans to add WeChat Pay capabilities, and the adjustment will cover all Taobao and Tmall merchants.

Taobao Tmall also stated that the platform has always adhered to an open and cooperative concept, actively exploring interconnection and cooperation with various platforms, continuously improving the shopping experience for consumers, and making shopping more convenient, enjoyable, and efficient for consumers. Taobao 88VIP exclusive customer service responded that Taobao is committed to enhancing the shopping experience for consumers, and is currently inviting merchants to open WeChat Pay in batches.

WeChat Pay stated that the compatibility with Taobao platform merchants is currently being opened, and please pay attention to the official announcement of the Taobao platform for the specific launch time. WeChat Pay has always adhered to an open and cooperative concept, actively exploring interconnection and cooperation in various fields.

As the main payment service provider for Taobao, Alipay stated that openness, collaboration, innovation, and sharing are the basic spirits of the Internet and the general trend of industry development. Alipay stated that it will continue to deepen strategic cooperation with the Taotian Group, increase technological and product innovation, and continue to create greater value for merchants and consumers.

From mutual blocking to "interconnection and interoperability".

Some people have observed that this is the first substantial realization of "interconnection and interoperability" between WeChat and Taobao after 11 years of mutual blocking.

In early November 2013, WeChat banned the Alibaba's instant messaging software 'Laiwang'; on November 22, Mobile Taobao blocked WeChat and closed the channel for redirecting to Taobao's commodities and stores a few days later.

Since then, the two internet giants have been in a state of mutual blocking. During this time, Taobao has repeatedly attempted to divert WeChat traffic, such as launching Taobao command and shop business cards in 2015 to replace links, but WeChat later cleaned up such information, leading to the continuous 'blocking war' between the two giants.

In fact, the 'cut-off' between Taobao and WeChat is not a unique case. In the past decade, other internet giants have also frequently blocked external links. For example, WeChat once prohibited direct opening of links to platforms such as Jinri Toutiao, Douyin, Netease Cloud Music, and ByteDance's platforms also do not allow direct opening of WeChat public account links by users.

In order to break the deadlock of major internet giants not communicating with each other and mutually blocking each other, in 2021, the Ministry of Industry and Information Technology specifically required internet companies to rectify the issue of blocking website links, etc.

In the same year, Taobao first integrated with Tencent Video. In the following three years, users were able to access external Taobao links in one-on-one chat scenarios on WeChat, and later extended to group chat scenarios. Subsequently, sellers on Taobao and Tmall were able to directly connect their stores, commodity detail pages, and Taobao live broadcast rooms through WeChat's video accounts, Moments, mini-programs, and other advertising resources.

What does the full integration of Taobao with WeChat Pay mean for both parties?

In the era where traffic is king, the re-partnership of the two internet giants naturally results in mutual benefit and win-win outcomes.

Bocom International analyst Wang Pengbo told Jiemian News that this time, WeChat Pay becoming a payment service provider for Taobao can be seen as a model of multi-party win-win. Cross-platform and cross-payment tool cooperation is not only beneficial for enhancing payment convenience, but also for boosting consumption vitality, providing better services for businesses and users on Taobao.

According to 36kr holdings, Taobao is more actively promoting the project of integrating WeChat Pay. This move has significant implications for Alibaba in terms of both business and strategic aspects.

Firstly, it can help Taobao further expand into the lower-tier markets. In the past, users had to use Alipay for payment when shopping on Taobao, which may have caused loss of users who did not have Alipay downloaded in the final payment process. WeChat Pay, on the other hand, allows users to complete the transaction directly within WeChat, which helps improve the conversion rate of transactions and the frequency of users using Taobao.

"On a large scale, even a one-percentage-point improvement is significant." A person close to Taobao's business told 36kr holdings, "The six-month test results show that integrating WeChat Pay is effective for Taobao to acquire users from lower-tier cities."

WeChat official previously released a set of data in 2020, showing that WeChat Pay is the preferred payment method for 83% of users in county towns, and 78% in towns and rural areas, both higher than the 76% of urban users.

For Tencent, the most direct benefit of this cooperation is a new source of revenue. A top analyst from an investment bank told 36kr holdings that if users use WeChat Pay in Taobao, Taobao should pay a fee, known as the "payment institution service fee" within the industry.

In addition, regarding its impact on the industry, some analysts believe that the integration of WeChat Pay into Taobao has long been expected by the market. After continuous pilot testing, full-scale integration has finally been achieved, marking a historic breakthrough in interconnection between giants and setting a great example for further interconnection in the industry.

This article is compiled from multiple sources, including Jiemian News, Zhongxin Jingwei, 36kr holdings, Shanghai Securities Journal, LatePost, and Taobao announcements.