Alibaba to Enable WeChat Payments in E-Commerce Apps – Report (NYSE:BABA)

Alibaba (NYSE:BABA) will reportedly enable payments via Tencent’s (OTCPK:TCEHY) WeChat app on its e-commerce platforms Taobao and Tmall.

The change is set to come into effect in a few weeks, Wall Street Journal reported, citing people familiar with the matter.

Alibaba (BABA) first and foremost used to promote Alipay, a WeChat rival, as the main payment method on Chinese e-commerce platforms. Alipay was founded by Jack Ma and is affiliated with BABA.

The company has also been testing a payments tool with a small group of users since earlier this year, the report said, adding that testing showed that enabling access to WeChat Pay would enable Alibaba to acquire users, especially those in smaller cities.

WeChat currently has over 1.35 billion users and is one of the leading payment apps in China.

Chinese tech companies are facing regulatory scrutiny and calls to abolish “walled gardens.” Walled gardens are often described as an ecosystem that is closed and does not allow competitor products to penetrate.

Last quarter, BABA Chief Financial Officer Toby Xu said the company intends to continue investing in the development of its core businesses while reducing losses in other business units by improving operational efficiency.

Alibaba (BABA), once China’s top contender to become a trillion-dollar company, is facing competition from rivals such as PDD (PDD) and JD.com (JD).

China’s antitrust watchdog last week concluded a three-year process of “correcting” Alibaba (BABA) regulations and praised the internet giant for its compliance after fined the company $2.8 billion in 2021 for antitrust practices.