Authors | Wang Xiaojuan, Liu Baodan

In today's weather is good. Today's weather is good.

After more than ten years of open rivalry and hidden struggles, the two e-commerce giants, Alibaba and jd.com, unprecedentedly embraced each other.

Huawei Finance confirmed on September 26th from informed sources that the Taobao Tmall APP is about to officially integrate with jd.com's logistics; additionally, jd.com will also officially integrate with Alipay. Both parties have provided each other with their core capabilities.

This means that the internet giants have each erected high walls, established business barriers to form their own competitive strength, has become a thing of the past. Now, the barriers have been broken down, and all businesses are competing on the same stage.

Once sheltered under the huge system of internet giants, subsidiary businesses will also form broader business collaborations, seeking their best partners. They will explore the potential in the business, further enhancing efficiency.

This is also destined to be a cruel elimination match. Whoever can form their own alliance, only they can survive in this competition.

Open

Unexpectedly, in almost all areas including merchants, prices, and services, Alibaba and jd.com, which have been almost in a comprehensive battle for many years, are now opening up their most important business to each other.

The handshake between the two parties this time is the largest cooperation in the over 20-year history of their platforms. Whether it is Alipay for Alibaba or jd.com logistics for jd.com, it is the foundation of their respective ecosystems.

Specifically, in the future, when consumers shop on Taobao, merchants can choose to use jd.com logistics for shipping. This cooperation is expected to be implemented in October; jd.com logistics will also be integrated with Cainiao Express and Cainiao Stations.

For merchants and consumers, this will provide more flexible choices and will stimulate the business growth of jd.com logistics and Cainiao logistics.

Firstly, for platform merchants, the turnover rate of commodities can be further improved, and the complexity of management will be greatly reduced.

Previously, merchants with stores on jd.com and Taobao needed to manage goods separately on both platforms. Now, with Taobao integrating jd.com logistics, there is no need to separately stock up or arrange inventory. The integrated supply chain solution provided by jd.com logistics can also expand the customer base of more brand merchants from Tmall.

The delivery costs for jd.com merchants are expected to further decrease with jd.com logistics integrating Cainiao Express and Cainiao Stations.

In March last year, jd.com had already fully opened up its logistics interface, allowing merchants to use third-party logistics other than jd.com's logistics in order to obtain sufficient carrying capacity and elastic third-party logistics to cope with the increasing frequency of platform trades and the decreasing average customer unit price trend.

When the e-commerce industry transitions from simply competing on low stock price to the stage of "competing on services," a more diversified service system can help platforms create a better environment for merchants, meet their diverse needs, and the platform can only achieve more growth, which will be reflected in GMV and other data.

Beyond express logistics, this kind of cooperation also extends to the payment sector. jd.com has also embraced Alipay on its e-commerce platform. In addition to jd.com Pay, UnionPay QuickPass, and WeChat Pay, jd.com is now capable of using Alipay as well.

To some extent, this can alleviate the impact brought by the previous link between Taobao and WeChat Pay.

Shen Meng, a director of H&H Capital, stated in an interview with Wallstreet CN that the interoperability between jd.com and Alibaba, similar to the interoperability between Alibaba and WeChat previously, is the implementation of previous policy requirements, which can reduce consumers' usage costs.

Some consumers have expressed that previously they mainly shopped on jd.com because it was fast. Now with jd.com delivery available on Taobao, shopping on Taobao will have even faster delivery times in the future. Additionally, being able to use Alipay on jd.com, there is no need to switch back and forth, making it much more convenient.

In short, Alibaba and jd.com working together is a beneficial situation for platforms, merchants, and consumers alike. The purpose is to create greater value through deeper collaboration.

Demolish the walls.

Internet giants starting to interconnect has become the trend in the industry.

In the past twenty years, China's internet industry has gone through fierce competition and confrontations. Now, step by step, it is moving towards openness. This is the inevitable development of the industry and also an important practice of the internet spirit.

In the early stages of competition, companies all wanted to extend their reach, trying to bring users into their own ecosystem. Then, after 2010, e-commerce giants quickly formed, each developing their own payment methods. For convenience, users had to use a combination of these.

Around 2011, JD.com also supported Alipay, but later Alipay was discontinued due to factors like fees, causing a sharp decline in the relationship between JD and Alibaba. Especially as competition intensified in the e-commerce field, they even went to court over forcing merchants to 'choose one out of two'.

After the tensions escalated to a certain extent between different companies, regulatory actions were taken. In 2021, the Ministry of Industry and Information Technology proposed to ensure the normal access of legal website links, and in the same year, Alibaba was fined 18.2 billion for violating the Anti-Monopoly Law.

Subsequently, at a macro level, various companies emphasized openness, but it was only about past link sharing among companies, no longer the extreme chaos or censorship. It is far from being truly open.

In recent years, the openness of various companies has expanded to not blocking each other's links, ads appearing on each other's platforms, providing core business with redirect functions, etc., but it has never touched on core businesses like payments. For example, ads for Fliggy started appearing on QQ Music. Starting in 2021, ads for Tencent Video, Tencent News, etc., and Taobao links in WeChat can directly jump to Taobao.

However, this year the major players have significantly opened up their core businesses. Before joining hands with JD.com, Tencent and Alibaba also took the lead in reconciliation. In early September, Taobao released the 'Opinions on Soliciting Opinions on Adding WeChat Payment Capabilities'. To enhance consumer shopping experience, Taobao plans to add WeChat payment capabilities.

Compared to the superficial openness of the past, nowadays the opening up of core business is still being driven by the underlying business logic.

For Alibaba, this cooperation with JD.com Logistics can provide consumers with a better shopping experience, consistent with the development philosophy of "user first".

Alibaba CEO Daniel Zhang, who took office in September last year, wrote in his first company-wide memo that putting users first is the strategic focus. In order to create the best user experience, they must seek the broadest openness and collaboration, including with companies that traditionally compete with them.

For JD.com, especially, with Taobao's annual e-commerce transaction volume at the scale of 8 trillion, there is an opportunity to handle the largest e-commerce platform's volume domestically, greatly benefiting the development of JD.com Logistics.

This will allow internet giants to, as they enter the era of stock, and face user growth bottlenecks, improve efficiency by providing users with greater convenience. It is not only about openness, but also extending their reach into others' territory.

As major companies split their businesses and grow independently, it becomes even more necessary to break through previous barriers. Introducing another absolutely strong competitor also helps to compete more fully, allowing companies to reduce costs and gain more profits.

Once barriers like payment are removed, competition naturally returns to the products' quality, price, and services provided by each company. To a certain extent, openness has brought about a fairer competitive environment, providing users and businesses with more choices. To continue growing, each company needs more pragmatic capabilities to attract users.

Especially with the rapid rise of new giants like ByteDance and pdd holdings, breaking the inherent pattern of the internet arena. Alibaba, Tencent, and JD.com, the once big brothers, also need to join forces and rapidly advance towards their respective business goals.

As times change, the relationships among industry leaders are also ever-changing. The internet industry has entered a new era of greater openness, emphasis on collaboration, and pursuit of efficiency.