Why are Ali and Tencent interconnected?

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Source/spiral lab (ID:spiral_lab)

Ali and Tencent tentatively held hands again, but they didn’t seem to hold hands completely.

On October 11, an employee certified as Alibaba Group broke the news on Maimai that “88 VIP points can be exchanged for free Tencent Video membership, which has been tested in internal grayscale and is expected to be launched before Double Eleven”.

Later, 88VIP customer service also said, “It will be launched soon, and the specific launch time is subject to the page display.” This cooperation between the two parties seems to be ready to happen.

But the next day, Tencent sent an unkind reply, saying that “there is no access plan for the time being, and the specific information is subject to the official announcement.”

In fact, similar plots have not been uncommon in the past year. Often, the two giants have just tried to connect with each other, but in a blink of an eye, there is no more. It’s like a pair of lovers who are about to establish a relationship. Although they both understand each other’s thoughts, no one is embarrassed to take a substantive step first.

Ali members enjoy Tencent Video VIP

Although Tencent’s reply was not too friendly, it is very likely that Alibaba’s membership rights will include Tencent Video’s VIP in the future.

Although it will not be settled in the form of official cooperation, there will be many other solutions. A person close to Tencent revealed that the two parties are in the process of negotiation. Simply put, Ali purchases Tencent Video cards and exchanges them for users.

This is actually similar to the “centralized procurement” model before the e-commerce promotion in the early years. The platform reduces the unit price by purchasing large quantities from the source channel, and then resells it to customers. It’s just that Ali does not plan to sell directly this time, but to exchange it in the form of member points, thereby increasing the retention rate of users in the Ali ecosystem.

In fact, Ali has tried a similar method before. For example, in Alipay, users can exchange Alipay points for members of other 10 major video and audio platforms, including Tencent Video, iQiyi, Mango TV, etc.

However, compared with Alipay’s points activities, 88VIP has a higher strategic height for Ali, and every move is more of a weather vane.

88VIP started in 2018 and was personally initiated and launched by Zhang Yong, chairman and CEO of Alibaba Group. As the only general membership system in Alibaba ecosystem, except for ID, “88VIP” is also regarded as Alibaba’s No. 1 project.

After users activate 88VIP, they can enjoy a number of special service privileges in the Alibaba ecosystem. Not only do they have discounts on Tmall and Taobao, but they also automatically get annual memberships including Youku, Ele.me, Xiami, and Taobao.

88VIP is of great significance to Ali. As of the end of June 2022, 88VIP members have exceeded 25 million, and the annual per capita consumption of members exceeds 57,000. Although Ali has always claimed that 88VIP is not a profitable project, it is also of great significance to the introduction and retention of traffic in the Ali ecosystem.

In fact, the e-commerce membership system similar to 88VIP is not Ali’s first in China. The founder is another e-commerce giant, JD.com, which launched a similar service as early as 2015.

After the launch of 88VIP, JD.com also quickly enriched the membership rights and interests of its own platform, and launched joint membership with more than ten platforms such as Tencent Video, iQiyi, Himalaya, and Bilibili. As of July 2022, JD.com PLUS members The number has exceeded 30 million.

However, unlike JD PLUS members, most of the annual card membership rights provided by Alibaba’s 88VIP are based on Alibaba-based platforms. With Tencent, there has never been a joint name. It is no wonder that the news of the cooperation disclosed this time has attracted so much attention.

Tencent “rejected” Ali for JD.com?

The news about Ali 88VIP’s access to Tencent’s product rights is not the first time. In August last year, some netizens broke the news that 88VIP will access QQ Music’s green diamond annual card rights, but up to now, 88VIP has not included it. Enter Tencent products.

The participation of Tencent Video members in the rights and interests of 88VIP is not a joint cooperation in the official sense, but is carried out in the form of Alibaba’s bulk purchase.

Tencent’s attitude seems very ambiguous. On the one hand, it publicly denied the official cooperation, and on the other hand, it is indeed secretly sending good news with Ali, including the previous activity of Alipay points can be exchanged for Tencent Video members, which may be regarded as a test of the waters of the two parties in the procurement of members’ rights and interests.

As for why the cooperation level will not be raised to the enterprise level, Tencent may be concerned about the interests of other partners, and JD.com will be directly affected.

In the past few years, Jingdong PLUS members have been maintaining close cooperation with Tencent, especially on the eve of June 18 this year, the two parties have even upgraded the “Jingteng Annual Card Membership”, users only need 136 yuan to get Tencent Video VIP Annual card + JD PLUS annual card, and this price is basically equivalent to buying Tencent Video’s annual membership and then giving away a JD PLUS annual card for free.

Although Tencent is no longer the largest shareholder of JD.com, the cooperative relationship between the two parties is still close. As a business ally who has worked side by side for many years, Tencent has been sparing no effort to provide support for JD.com. In June this year, the two parties renewed the three-year strategic cooperation agreement, and Tencent will continue to provide JD.com with significant primary and secondary access portals on the WeChat platform to provide traffic support.

Taking into account the direct competition between JD.com and Ali in the e-commerce field, Tencent will naturally leave the most advantageous resources to the most important partners. At least at the official level, it will not truly be equal to JD.com and Ali.

If Tencent officially cooperates with 88VIP at this time, since the price of 88VIP (88 yuan for naughty points above 1,000 points) is lower than that of JD PLUS annual card, then it is tantamount to “backstab” JD. Based on business ethics or cooperation agreements, Tencent may fall into a situation of “not human inside and out”.

However, based on its own development considerations, Tencent Video also needs to actively look for increments outside the site, and 88VIP has had many successful cases before. According to Ali’s financial report, for every 100 new 88VIP users, 38 Youku users, 32 Ele.me users and 27 Taopiao Piao users can be added.

Why is the interconnection twisted?

As the two Internet companies with the highest market value and the largest traffic in China, the interconnection between Alibaba and Tencent has always attracted much attention, and the executives of both sides have expressed their willingness to speed up the interconnection process in various public occasions.

Zhang Yong, chairman of Alibaba’s board of directors, said at last year’s earnings analyst meeting: “The social value generated by the big cycle between platforms must be far greater than the small cycle within a single platform. If the platforms can be interconnected, It will definitely bring new reform dividends.”

Tencent President Liu Chiping has also stated before: “Interoperability between platforms is a very complex issue that needs to be discussed and resolved over time. Once these issues are not handled properly, our users and many small and medium-sized brands on the platform will be affected. and businesses. So we’re going to deal with those issues very carefully.”

However, in terms of specific measures, the interconnection of the two giants has always shown a twisted attitude, completely lacking the style of the Internet giants.

In July last year, it was reported that Alibaba and Tencent were considering opening up their ecosystems to each other. Alibaba’s initial moves may include introducing Tencent Holdings’ WeChat Pay to Taobao and Tmall, and Tencent may allow Alibaba’s e-commerce information to be published in WeChat share.

But more than a year later, these envisioned interconnection measures have not materialized.

During this period, it was not without some tentative ice-breaking actions, such as Ali’s Ele.me, Youku and other applications accessing WeChat payment, and in January this year, WeChat also began to support the opening of Taobao product links in the WeChat dialog box.

However, higher-level interconnection and normalized “wall-breaking” measures have not appeared in the business operations of Alibaba and Tencent. The reason behind this may still come from the huge business ecology of the two giants themselves.

On the one hand, comprehensive interconnection is likely to have an impact on its own business partners. For example, in the field of e-commerce, Tencent has successfully supported JD.com, Pinduoduo, Vipshop and many others with its own traffic portal. Enterprises, and now once Ali-based e-commerce also enters Tencent’s traffic pool, Tencent’s e-commerce allies are bound to lose their asymmetric advantages.

On the other hand, considering the sluggish situation of the global Internet industry in the past two years, Ali and Tencent also lack full confidence in the actual results of interconnection, especially some key data that will affect financial reports and stock prices. Be more cautious so as not to open up all the internal ecology to the outside at once.

However, in terms of user experience and the development of the Internet ecosystem, the tide of “interconnection” is irreversible, but it takes a process for the elephant to turn around, and you have to wait patiently.

This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-10-13/doc-imqqsmrp2464259.shtml
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