Shoppers gain more options as Chinese e-commerce giants Alibaba, JD take steps towards integration

BEIJING – Consumers will have more payment and delivery options to choose from on major Chinese e-commerce platforms such as Taobao as cross-platform integration is promoted.

On September 27, WeChat Pay was added as a payment option on Alibaba’s online platforms Taobao and Tmall, adding to Alipay and credit and debit cards.

From mid-October, consumers shopping on Taobao and Tmall will have another delivery option from JD Logistics, considered one of the most reliable in China, in addition to Alibaba’s own Cainiao distribution service.

In return, JD will introduce Alibaba’s Alipay payment service and Cainiao delivery services on its platform.

The integration of payment and logistics services on competing platforms marks a departure from the previous model.

This followed the entry into force on September 1 of the China Internet Industry Regulation, which aims to prevent and deter unfair competition between platforms, maintain market order, encourage innovation and protect the rights of operators and consumers.

Before 2021, major players in China’s e-commerce sector operated in isolation, creating “walled gardens” that forced users to stay on a single platform while companies aggressively protected their ecosystems.

However, in Beijing’s crackdown on the tech sector this year, Alibaba was hit with a record antitrust fine of 18 billion yuan (S$3.3 billion) for abusing its dominant market position.

Since then, companies have started taking small steps to open up their ecosystems, such as Tencent’s WeChat app allowing users to access Alibaba’s Taobao links.

Li Jianggan, chief executive of Singapore-based Momentum Works, said Chinese technology companies have reached a point where the only way forward is through collaborative competition.

“Most tech companies have exhausted their natural growth potential, so lowering the walls gives players on both sides further opportunities to grow,” he added.

For example, Taobao can now reach older consumers in less developed regions of China who largely prefer WeChat Pay over Alipay, while WeChat Pay can access a larger user base of Taobao shoppers, said Li, who also co-authored the book Seeing The Unseen: Behind Chinese Tech Giants Global Venturing.

Alibaba is the leader in China’s e-commerce market, but its market share has been declining since 2019 as rivals JD and Pinduoduo began offering lower prices.

Over the past two years, Douyin, ByteDance’s Chinese version of TikTok, has also been aggressively targeting more of the e-commerce market, further intensifying competition

Analysts say the gradual opening of gated gardens is not just a top-down initiative, but part of an ongoing trend also driven by broader industry dynamics.