Call for comments, Taobao and Tmall plans to add WeChat Pay
On September 4, Taobao and Tmall respectively released the “Call for Opinions on Taobao's New WeChat Payment Capabilities” and “Call for Opinions on Tmall's New WeChat Payment Capabilities”, stating that in order to improve the consumer shopping experience, Taobao and Tmall plans to add WeChat Pay capabilities, and adjust the platform rules after this call for opinions. This adjustment will cover all Taobao and Tmall merchants.
In late July, Taotian Group announced that starting September 1, 2024, it would charge 0.6% basic software service fees for confirmed transactions on Taobao and Tmall platforms, while canceling the annual fees of 0.03 million and 60,000 only charged to Tmall merchants. This move is conducive to increasing Taotian Group's revenue and profits, and is also conducive to the smooth progress of the WeChat Pay plan.
In line with the major trend of connectivity and enhance the consumer shopping experience
The Ministry of Industry and Information Technology held an “Administrative Guidance Meeting on Blocking Website Links” on the afternoon of September 9, 2021, requiring all platforms to be unblocked according to standards within the time limit. Companies such as Alibaba, Tencent, ByteDance, Baidu, Huawei, Xiaomi, Momo, 360, and NetEase all attended the conference. In August 2021, the Taobao app was connected to UnionPay Cloud QuickPass. Meanwhile, Ali's apps such as Are You Hungry, Youku, Damai, Koala Shopping, and Book Flag have all connected to WeChat Pay. At the time, apps such as Taotte, Leisure Fish, and Hema had also applied for access to WeChat Pay and were awaiting review by WeChat. This time, Taobao and Tmall plans to add WeChat Pay, which is in line with the trend of connectivity, which is conducive to building a more benign Internet ecosystem and further enhancing the consumer shopping experience. On August 30, 2024, the State Administration of Market Supervision and Administration issued a notice announcing that Alibaba Group has completed three years of rectification and achieved good results.
As far as Alipay is concerned, opening up is conducive to further opening up Alipay's development space. On September 4, Meituan's six core businesses, “Meituan Takeout,” “Meituan Power Bank,” “Meituan Cycling,” “Meituan Errands,” and “Meituan Hotel,” launched Alipay mini-programs. At the same time, Alipay said it will continue to deepen strategic cooperation with Taotian Group, and will increase open cooperation not only in payment products, but also in Internet technology, AI technology products, and the wider ecosystem.
Maintain profit forecasts and maintain “buy” ratings
Taobao and Tmall have added WeChat Pay, which is conducive to further improving the platform ecosystem and improving the consumer shopping experience. For the time being, we maintain our forecast of the company's FY2025/FY2026/FY2027 net profit attributable to common shareholders of 85.449/90.702/94.562 billion yuan. The company's organizational structure and development strategy are gradually becoming clear. After the Hang Seng Index added the Hong Kong Stock Connect Index to the rules on September 4, Alibaba-W is expected to speed up the process of inclusion in the Hang Seng Hong Kong Stock Connect Index and maintain the “buy” rating.
Risk warning: New business development falls short of expectations, increased competition in the industry, and the impact of live e-commerce.