Alibaba not coming across with mobile messaging

By Adam Skuse Source:Global Times Published: 2013-9-26 22:23:01

Alibaba Group's launch of its instant messaging app, Laiwang, underscores a confused strategy that will have a negative impact on its mobile e-commerce prospects if not addressed.

The "launch" of Laiwang - a WeChat imitator that apes the basic functions of Tencent's phenomenally successful mobile messenger - comes over a year after the service was actually made available. In that time it has scraped together 1 million users.

In comparison, WeChat piled on almost 50 million users in its first year of operation, and now has some 230 million monthly active users.

Even a deal that will see Laiwang preinstalled on China Telecom phones is unlikely to help much. Mobile users have already heavily invested in WeChat, where they have built up networks of contacts and data such as pictures and timelines. They aren't going to jump ship anytime soon, and there is no reason for them to use Laiwang in tandem with WeChat.

Alibaba has built up an unhealthy enmity for Tencent's WeChat, turning its back on what could be a huge driver for its core e-commerce interests.

True, there was a fling between the two that allowed Taobao searches from within WeChat, but that was ended soon after its launch earlier this year. Things took a turn for the worse last month, when Alibaba announced it was banning its vendors on Taobao from conducting business via WeChat, and blocked access to its systems for third-party WeChat apps.

Alibaba said this was due to security concerns and reports that some vendors had been harassing customers and circumventing its payment system. This sounds disingenuous, considering that buyers and sellers routinely go outside of the Taobao system by sharing phone numbers - which is allowed by Alibaba - through which they follow up on transactions.

Alibaba obviously recognizes the importance of mobile social networks to promoting its e-commerce operations. It invested $586 million to buy an 18 percent stake in Sina's Weibo platform - which is increasingly going mobile - in April, and is integrating the system with Taobao.

Tencent has been investing more into e-commerce over the past year, which, combined with its huge user base, may explain Alibaba's attitude. Unfortunately for Alibaba, e-commerce is a relatively simple and popular area for other Internet companies to get into. Fortunately for Alibaba, it is still the undisputed king of e-commerce in China, and will remain so for a long time. It is particularly strong in consumer-to-consumer, where Tencent has already had its nose bloodied with the failure of its Paipai platform.

WeChat has great potential for boosting e-commerce, both as a potential payment system but also as a means by which friends can share recommendations. Alibaba is foolish to turn its back on the platform in favor of its own mobile messaging system that has little hope of reaching any significant number of users.

The author is a freelance writer.

adam.skuse@yahoo.com

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