Taobao launches Weibo service

Competition between Alibaba Group's Taobao online market­place and Tencent's WeChat has escalated to a new level, analysts said Tuesday.

Alibaba and Sina launched their highly anticipated Weibo-based Taobao services Monday, only a few hours after ­Alibaba's competitor Tencent Holdings released the newest version of its popular mobile social networking application, WeChat 5.0.

"This is a life-or-death war in the mobile Internet market," Dan Ren, chairman of Shenzhen Danren Information Corporation, wrote in a commentary published by news portal ifeng.com Tuesday.

"WeChat has a very strong technology background, but ­Alibaba is more capable in organizing the development of commercial applications and bringing its products to a wider audience," Dan wrote.

Tencent has made online payment available for users of WeChat 5.0, an instant messaging service that allows its users to exchange text, voice and picture messages.

The online payment function simplifies the procedures for WeChat users to purchase products directly via the application.

WeChat's involvement in e-commerce could pose a challenge to Taobao, China's largest online marketplace that was founded by Alibaba in 2003, Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting, told the Global Times Tuesday.

The new version of WeChat, which reportedly has nearly 500 million users in China and 70 million overseas, is also equipped with a book cover scanner that could lead its users directly to business-to-consumer websites including amazon.com and dangdang.com.

The Weibo-based Taobao, on the other hand, offers Taobao shop owners tailored services, such as follower analysis and visitor statistics, for them to better promote their products on Weibo. It also allows Weibo users to buy directly from a Taobao store's Weibo page.

Lin'an Xinnongge Food Co, a nut seller on Taobao, told the Global Times Tuesday that it is preparing to use Weibo-based Taobao.

"It can direct many of our Weibo followers to our Taobao store," said an employee in charge of online promotion. The company also has a public WeChat account but does not sell its products there.

Yang Xuebin, an industry analyst with Beijing-based Internet market research company iResearch, told the Global Times Tuesday that Taobao and the newest WeChat will not be direct competitors in the near future.

"WeChat 5.0 is trying to make money out of paid applications and games, while Taobao is connecting with Weibo to make its sellers and customers more active in selling more goods," Yang said.

However, Lu said Taobao and WeChat 5.0 are likely to become competitors eventually since they are both interested in the online-to-offline (O2O) business model, in which the Internet is the first stop for customers to get promotions and reviews that then lead them to offline, physical companies and stores.

"WeChat 5.0's strong scanner service can effectively bring its online users to offline stores, and that has been one of Alibaba Group's major development areas for the future," Lu said.