A mobile payment battle between Alipay and WeChat continues to rage in offline supermarkets across China as retailers pledge their allegiance to the competing giants in an increasingly cashless society.
In 2018, WeChat parent Tencent has had several big wins in omnichannel mobile payment. In late March, WeChat Pay gained control over mobile payments at Walmart stores in China’s western region as the retail giant announced it was dropping Alibaba’s Alipay at these locations. Earlier in the year, Tencent announced that it would take a stake in Carrefour China. Also buying a stake as a part of the deal would be supermarket chain Yonghui, which received investment from Tencent in December last year.
While Alibaba’s Alipay is currently the leader for mobile payment market share in China, WeChat Pay is quickly gaining on it. The two mobile payment giants are courting retailers with access to troves of data and advanced CRM capabilities in exchange for their loyalty.
Alibaba has also been investing big in omnichannel supermarkets and hypermarkets over the past several years, buying stakes in the Sun Art Retail Group and Bailian Group. It has also been working on digitizing small mom-and-pop convenience stores that are common across China. Only three of China’s top 10 supermarket chains have yet to choose a side in the mobile payment race.
In addition to mobile payment, the dueling tech giants offer offline chains access to competing e-commerce platforms, including JD.com, which boasts Tencent as its largest shareholder, and Alibaba’s Tmall. While Tmall is the larger of the two in terms of market share, JD.com offers the benefit of a partnership with WeChat. Walmart and Yonghui both take advantage of one-hour delivery with JD.com logistics. Walmart also teams up with JD.com for omnichannel promotions, which were covered in L2’s CPG China Digital IQ Index.
These partnerships also offer extensive data to Alibaba and Tencent for their own forays into offline commerce. Alibaba is rapidly expanding its presence of Hema grocery stores in China, while JD.com launched its new 7Fresh chain this year.
China’s supermarkets aren’t the only areas where these mobile payment giants are competing. Department stores, malls, and international retailers are also omnichannel battlefronts for reaching Chinese consumers’ mobile wallets as their real ones become obsolete.