Before Double Eleven this year, Alibaba and Tencent gave the outside world a surprise. Recently, Alimama and Tencent Advertising officially announced their cooperation to achieve comprehensive direct connection of Taobao and WeChat advertising traffic and launch the "Double 11 Super Explosion" plan. To put it simply, Taobao merchants can use Alimama’s advertising system to deliver traffic to WeChat video accounts, Moments, mini programs and other ecosystems.

This also revealed a signal that the decade-long "blockade war" between Taobao and WeChat is finally coming to an end.

In the competition over the past many years, Alibaba and Tencent have tried to defeat each other many times. Starting in 2013, Taobao and WeChat have cut off links with each other, and the competition between the two parties has intensified. In 2021, the Ministry of Industry and Information Technology came forward to rectify external link blocking, and Taobao and WeChat were forced to start breaking the ice. Today, both parties have chosen to actively open up. It can be said that times have changed and reforms are in order.

Facts have proven that neither Taobao nor WeChat can take away the other. Instead of continuing to fight against each other and losing each other, it is better to work together and share the cake together. In addition, there are very few businesses that have substantial conflicts between Tencent and Alibaba. Cooperation may be the beginning of a win-win situation.

The era of mutual benefit and win-win cooperation has come

To a certain extent, Alibaba and Tencent now need each other.

Ten years ago, Taobao was still the absolute leader in the e-commerce industry, with no rivals left or right. According to data from iResearch, Taobao's e-commerce transaction volume reached 441 billion yuan in 2013, more than three times that of second-ranked JD.com, completely crushing all other e-commerce platforms on the market.

But today, although Taobao is still the largest e-commerce giant in China, it is surrounded by powerful enemies. Financial report data shows that in the quarter ending December 31, 2022, the GMV of Taobao and Tmall physical goods (excluding unpaid orders) fell by mid-single digits year-on-year. The main reasons mentioned were reduced consumer demand and continued competition.

During the same period, live streaming e-commerce represented by Douyin and Kuaishou, and sinking e-commerce represented by Pinduoduo, all achieved rapid growth in total transaction volume.

Under the attack of old rivals JD.com and new rivals Dou Kuai and Pinduoduo, Taobao is naturally under a lot of pressure. In addition, after the adjustment of Alibaba's organizational structure, Ele.me, which belongs to the local life section, has nothing to do with Taobao, so Taobao's e-commerce share will naturally be affected.

Looking at the entire Internet industry, WeChat’s huge traffic pool cannot be ignored. According to the financial report, as of the end of June 2023, the combined number of monthly active accounts of WeChat and WeChat reached 1.327 billion, covering almost the entire population of China.

In this era of shrinking advertising, Tencent's advertising business, which is responsible for monetizing WeChat traffic, also has more needs to increase revenue.

In terms of traffic monetization efficiency, Tencent Advertising is still challenged by the byte system, which can easily generate 200 billion advertising revenue a year.

In the early years, Tencent, as a shareholder, would join forces with JD.com and Pinduoduo to squeeze Taobao’s living space. But now that Tencent has "cleared out" its holdings in JD.com and may continue to reduce its holdings in Pinduoduo in the future, the competitive relationship between Tencent and Alibaba is also constantly weakening.

At this current point in time, it is not difficult to understand that Alibaba and Tencent are going in both directions.

The two giants "block" each other and refuse to give in to each other

"The farthest distance in the world is that you are on Taobao and I am on WeChat." This sentence has been true for a long time.

The trigger for Alibaba and Tencent to block each other stems from network security issues. In early 2013, Alibaba received some user feedback about security issues. After investigation, it was found that they were all standard phishing websites, forging Taobao pages and stealing users' private information. But at that time, WeChat did not have the function of querying the main domain name of a web page, and users could not distinguish between real Taobao pages and phishing pages on WeChat.

Therefore, Alibaba launched the "Dujuan Project" internally on the grounds that WeChat had security vulnerabilities. Instead of blocking access to WeChat, if a user opened a Taobao link in WeChat, they would be directed to the download page of the Taobao APP, and their shopping behavior could only be terminated.

But from Tencent's perspective, Taobao is a forced ban, which hurts users' communication experience. The act of transferring WeChat users to Taobao is tantamount to robbing the platform, so it quickly counterattacked.

Tencent directly blocks Taobao shopping sharing links and download pages on WeChat. If you click on the Taobao link, it will display: "The Taobao URL you are visiting has been blocked. If you need to browse, you can long press the URL to copy and access it with a browser." It also blocks WeChat public accounts, mini programs, etc. from Taobao. Some netizens have calculated that if you want to share Taobao products with your WeChat friends, you need to go through five steps.

The war between the two sides has gradually escalated, from the conflict between Taobao and WeChat to a systematic competition between the two giants. In February 2014, Alipay closed the payment interface for WeChat merchants. In 2015, after Alipay launched the red envelope function, it was immediately blocked by Tencent and could not be shared to WeChat or QQ.

In this protracted battle between the two giants, public opinions are divided, and supporters can be found in different positions. But what remains unchanged is that the giants all want to seize traffic entry points and realize a closed loop of monetizing their own traffic.

Begin to break the ice and test carefully

A turning point occurred in 2021. After eight years of mutual shielding, Taobao and WeChat opened a "hole" for interoperability.

In September of that year, the Ministry of Industry and Information Technology held an "Administrative Guidance Meeting on Blocking Website Links", with participating companies including Alibaba, Tencent and other major manufacturers. The three-point compliance standards proposed at the meeting require each platform to unblock URL links according to standards.

So WeChat took the first step on September 17. Taobao links can be forwarded to WeChat, but to open the link, you still have to go through access reminders, user login, etc.

By the end of November, WeChat entered the second phase of interconnection and announced updates to external link management measures, including "direct access to external links in peer-to-peer chat scenarios", "direct access to e-commerce external links will be trialled in group chat scenarios", etc. In other words, links on the Taobao platform can be opened directly without secondary confirmation.

Compared with the tortuous sharing model in the past, there is no need to jump to external links at this stage and the steps are simplified. It can indeed be seen that WeChat and Taobao have relaxed their restrictions on each other. But what needs to be recognized is that the cooperation between the two parties is still very superficial, and Taobao is still unpopular in the WeChat ecosystem.

Taobao links can still only be presented in the form of "text + link" on WeChat, and sometimes they are folded due to length issues. At the same time, WeChat has shown a strict regulatory attitude and stated that it must control the distribution of external links from the perspective of user safety.

In comparison, JD.com and Pinduoduo can obtain API permissions from WeChat, which are presented in the form of mini programs and mini cards, as well as product names, details and other content. They are much more user-friendly than Taobao.

Left Taobao/Right JD Pinduoduo

If the cooperation between Alibaba and Tencent in 2021 is more based on the passive lifting of external link blocking based on the requirements of relevant departments; then behind their current choice of active cooperation, they see more prospects for a win-win situation.

This is a memorable moment in the face of the vision of the Internet to truly realize interconnection.

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