Alibaba to allow payment through Tencent's WeChat Pay for the first time on e-commerce apps

Chinese tech giant Alibaba on Wednesday said that its core Taobao and Tmall e-commerce platforms will now allow payment through Tencent's WeChat app for the first time.

Previously, Alibaba's Chinese e-commerce sites only accepted limited payment options and pushed WeChat Pay rival Alipay as one of the main ways to pay. Alipay is run by Ant Group, an affiliate of Alibaba that was also founded by Jack Ma.

"We have always been open to collaborations, and have actively explored interoperability and partnerships with our peers," an Alibaba spokesperson told CNBC. "We are constantly working to enhance user experience by making shopping more convenient, enjoyable, and efficient."

Taobao and Tmall will likely begin accepting payments through WeChat Pay this month, a source familiar with the matter who was not authorized to disclose the details publicly, told CNBC.

The historic move comes as Alibaba looks to reignite growth in its China e-commerce business, which has been under pressure from a sluggish Chinese consumer and from competitors like JD.com amd Temu-owner PDD.

Alibaba CEO Eddie Wu has previously said that the Taobao and Tmall business should return to growth toward the latter half of the firm's fiscal year 2025.

WeChat has more than 1.3 billion users globally, the majority of whom is located in China. WeChat Pay is one of the biggest mobile payments apps in the country.

By allowing users to transact through WeChat Pay on Taobao and Tmall, Alibaba could therefore increase its market share in less developed parts of China, the source said.

The company's biggest rival JD.com has also allowed WeChat Pay to be used on its platform for a long time.

Another theme in the background is the regulatory scrutiny that Beijing has put on Chinese technology companies, urging these firms to bring down their so-called walled gardens that block competitors' products.

Alibaba and Tencent are two of China's largest internet companies that have built dominance through their sprawling services, which often center around their so-called super apps. That prominance created a situation where, for a long time, rivals would not allow access to each others' services on their respective platforms.

Tech giants started to change these practices over the past few years, amid criticism from regulators. In 2021, Tencent began allowing users to access external links in one-on-one chats. For example, if someone shared a link from Alibaba's Taobao in WeChat, a user would be able to open that without leaving the messaging app. That same year, some of Alibaba's other apps began supporting WeChat Pay.

Last week, China's market regulator said Alibaba had completed a three-year regulatory "rectification" process following a 18.23 billion yuan ($2.6 billion) antitrust fine the company received in 2021.