The Chinese tech giants are famous for building super-app ecosystems
that could provide a whole host of services. But these app ecosystems do not accept payment options from rival companies or even blocked links to rival apps.
But the great walls of China's tech space may soon be coming to an end. Alibaba
, the e-commerce giant that is said to have started a revolution in the country, will now accept WeChat Pay
on some of its apps.
WeChat Pay is a payment platform from Alibaba’s rival tech company, Tencent
. Alibaba also has its own payment platform Alipay under the affiliated Ant Group.
According to an Alibaba spokesperson, the company would "continue to find common ground with our peers in the platform economy to better serve Chinese consumers."
Why this is a big deal
Alibaba and Tencent are two of the largest internet-based companies in the world. They have relied on their app ecosystem to raise a new generation of individuals in the strata of billionaires in China. However, these tech giants were operating as walled gardens not allowing users on their platforms to use services offered by rivals.
The Chinese government has launched a crackdown on these tech platforms over the last 11 months. Companies like Tencent, Alibaba Group, Didi
and many others have had to deal with increased regulatory pressure as China started to muzzle its tech billionaires.
The adversarial stance taken by the Chinese authorities has seen the biggest wealth drop in the world. Beijing's crackdown on tech giants wiped off $769 billion in value
from the US-listed Chinese stocks in just five months, Bloomberg reported in July.
Tech companies have been on the receiving end of regulatory action for the better part of nearly a year, as China slowly made them fall in line. A major cause of action has been new rules introduced by Chinese authorities on matters relating to data privacy and collation, administrative requirements of running payment platforms and anti-monopoly activities.
What triggered the move?
With China aiming to bring down the great walls of its tech companies that have used monopoly practices to profit off of the world's largest population, the companies were asked to stop the practice of blocking each other's content.
The Chinese Ministry of Industry and Information Technology (MIIT) asked companies like Tencent, Alibaba and ByteDance
to stop blocking links to each other's services.
Without any means to fight the regulators, and already battered by a year of pressure the two companies announced that they would be complying with the directives as soon as possible.
“We resolutely support the decision of the Ministry of Industry and Information Technology and implement it in phases,” said Tencent, according to the Financial Times.
Alibaba said that it “will fully comply” with the orders from the ministry of stopping the nearly decade-old practice.
Less than two weeks later, Alibaba has already integrated Tencent's WeChat Pay on several of its apps and Tencent is expected to add Alipay to its own app ecosystem sooner rather than later.
(Edited by : Yashi Gupta)