Tech giant Tencent (00700.HK) is bringing the fight for vendors to rival Alibaba with an online store embedded in its popular instant messaging service WeChat.
Vendors can open their own online sales channel on the Weixin Store platform and all they need is a 20,000 yuan (US$3,200) deposit and a Weixin Payment account, Tencent’s online third-party payment system similar to Alibaba’s Alipay, an escrow service which accounts for roughly half of all online payment transactions in China.
Weixin Store is meant to provide an easy-to-operate online sales platform for people with little or no technology background at all, according to Tencent spokesman Zhang Jun.
The set-up procedures are simple and easy to follow, allowing images of goods to be uploaded and categorized quickly.
Weixin, which has about 400 million monthly active users, has been valued at as much as US$64 billion by investment bank CLSA.
Tencent plans to make money from the app through advertising, gaming and e-commerce services, putting it in direct competition with Alibaba for the estimated 302 million Chinese online shoppers.
About one-third of vendors on Alibaba’s Taobao online store now have Weixin accounts, according to e-commerce research institute Analysys.
Although Weixin’s e-commerce platform had been chaotic before the launch of Weixin Store, the situation is likely to improve with the new offering.
It is too early to say whether Weixin can compete with Alibaba’s well-established Taobao and Tmall platforms.
In addition, a recent criticism by the official People’s Daily about its business model is not helping matters.
The Communist Party organ accused Weixin of changing its platform, originally meant as a communication tool, to boost advertising and promotions. It’s not clear how all this will affect the new business going forward.
–- Contact the writer at [email protected]