Alibaba Group Holding Ltd. will allow users of Sina Corp. (SINA)’s Weibo to shop on its e-commerce website after suspending sellers’ access to competitor Tencent (700) Holdings Ltd.’s instant messaging application WeChat.
China’s biggest e-commerce company will let shoppers log on to its Taobao Marketplace using their Weibo accounts, Alibaba and Sina said in a joint statement yesterday. Alibaba disabled sellers’ access to WeChat applications in its own app shop, citing security reasons, Alibaba spokeswoman Florence Shih said in an e-mailed statement yesterday.
Alibaba, which in April agreed to buy a stake in Sina’s Weibo unit, is developing its mobile e-commerce business as more Chinese shoppers use smartphones and tablets to buy goods. WeChat had 194 million monthly active users as of May and plans new services to commercialize the application in the second half, according to Tencent.
“Alibaba wants to create its own community as opposed to benefiting Tencent,” said Billy Leung, an analyst at RHB Research Institute Sdn. in Hong Kong. “Tencent is a very strong force. They’ve got money backing, they’ve got user base.”
There were more than 464 million mobile Internet users in China by the end of June, more than the population of any country except India and China itself, according to the China Internet Network Information Center.
“We do not comment on other companies’ business decisions,” Lake Zeng, a WeChat spokesman, said in an e-mailed statement yesterday.
Some sellers on Alibaba have tried to steer transactions away from its Taobao Marketplace and Tmall.com platforms, and disturbed customers through promotions on WeChat, Alibaba said in its statement. The block ensures sellers “conduct their marketing activities in a safe and legitimate manner,” according to the statement.
Unlisted Alibaba, which started developing its mobile business three years ago, hasn’t kept up with Tencent’s WeChat, Alibaba Chairman Jack Ma said at the Credit Suisse Asian Investment Conference in Hong Kong in March.
Since then, Ma has taken steps to win more mobile users, including announcing to buy an 18 percent stake in Sina’s Weibo unit. The microblogging service had more than 49.8 million daily active users between December and March. Alibaba and Sina are working together to develop social e-commerce services, Charles Chao, chairman and chief executive officer of Sina, said during an earnings call.
Tencent rose 2.5 percent to HK$360.60 at the close in Hong Hong trading yesterday.
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