Can TikTok owner ByteDance break the mobile payments duopoly of Alipay, WeChat Pay?

The new mobile payments service launched by tech unicorn ByteDance on its video-sharing platform Douyin, the sister app of TikTok, brings a major challenger in a market long dominated by Ant Group’s Alipay and Tencent Holdings’ WeChat Pay, industry analysts said.

Douyin, which had 600 million daily active users as of August 2020, is expected to promote its Douyin Pay service in this year’s Spring Festival Gala, according to people familiar with the matter, under an exclusive advertising partnership with state broadcaster China Central Television (CCTV).

Taking part in the Spring Festival Gala – the world’s most-watched national TV broadcast, which had an audience of more than 1.2 billion last year – would follow Tencent’s approach to growing the user base of WeChat Pay, which launched virtual red packets in 2014 and partnered with CCTV in 2015 to promote these digital hongbao at the annual event.

Alibaba Group Holding founder Jack Ma had described WeChat Pay’s launch in 2014 as Tencent’s “Pearl Harbour” attack on Alipay’s then-dominant position in mobile payment services in China. Alipay operator Ant Group is an affiliate of Alibaba, which is the parent company of the South China Morning Post.

Douyin Pay was launched days before the People’s Bank of China, the country’s central bank, published its draft regulation on payment services. The new regulation, which is expected to come into effect soon, said that a non-bank payment institution with a share of more than half of the market – or two such institutions with a combined market share of over two-thirds – will be regarded as a monopoly and could be carved up as a result.