Mobile e-commerce battle heats up in China
Rivalry between Tencent and Alibaba intensifies after they roll out new products on the same day to tap the mainland's US$395 billion market
The battle between the mainland's internet giants Tencent and Alibaba for dominance in the country's rapidly expanding mobile e-commerce market is a fight that could be worth US$395 billion.
So the rollout of products in recent days by the two firms to stake a claim to territory each had previously thought they essentially owned is a sign of the turf wars to come.
If you have the users first, you have a significant advantage
"There is obviously some tension in the market, with two new products introduced on the same day," said Terry Chen, an analyst with brokerage CLSA. "Tencent's effort in monetisation is beginning, with games and payment services all started doing business. It is unknown how many people will take to using them and paying, so the growth is up to people's imagination."
Tencent launched on Monday WeChat 5.0, a new version of the world's fifth-most popular smartphone app, according to research firm GlobalWebIndex, with new monetisable features including a game centre, sticker shop, mobile payments and barcode scanning for e-commerce transactions.
On the same day, Alibaba unveiled a service that lets users trade on Sina's weibo microblog platform directly, a step into the social realm.
Chee Wee Gan, principal at consultancy firm AT Kearney, said the mainland e-commerce market was growing rapidly, with more and more businesses entering the business-to-consumer market, slowing the growth of the consumer-to-consumer market, Alibaba's home turf.
Consultancy McKinsey reckoned the country's e-commerce market would triple to US$395 billion from 2011 to 2015.