Retailers Take Sides In Battle Between Alibaba And Tencent

Alibaba and Tencent, which are locked in a battle to win over consumers, have invested more than $10 billion in retailers since the beginning of 2017. As a result, retailers are taking sides, CNBC reported.

“All of the retailers in the brick-and-mortar world are very worried,” Jason Yu, Shanghai-based general manager of market research firm Kantar Worldpanel, told CNBC. “They have to take a side. Otherwise, they are afraid they will be eaten alive in the future.”

The push is driven by the large cash piles and rising share prices of Alibaba and Tencent. As a result, the companies are locked in a race to get consumers and merchants to join their payment, logistics, social media and Big Data platforms.

By working with Alibaba and Tencent, merchants can access payment systems and logistics services — as well as Big Data. When Alibaba invested $486 million in February in one retail-centered Big Data firm, for example, Alibaba said the deal could “help brick-and-mortar retailers succeed in the digital age.”

Like their American counterpart Amazon, Alibaba and Tencent are fashioning themselves identities that have less and less to do with online shopping and more to do with an integrated life approach. As a result, the companies are rolling out mobile payments at even more physical stores.

Alibaba took an 18 percent stake in supermarket and convenience store operator Lianhua Supermarket Holdings in 2017, catapulting the company’s stocks by as much as 34 percent at the time. Alibaba and its financial services arm, Ant Financial, invested over $1 billion in Chinese food delivery service Ele.me. The investment will value Ele.me at $5.5 billion to $6 billion and help it compete against Tencent’s food delivery service, Meituan-Dianping.

Alipay has also teamed up with Atlanta-based credit card processing service First Data to give Americans (and Chinese tourists in America) mobile payment options at 4 million U.S. stores. And, in the U.S., Tencent’s WeChat payment platform has partnered with Silicon Valley mobile payment company Citcon.