![]() ![]() The rules, issued by the State Administration for Market Regulation (SAMR) on its website, bar companies from a range of behaviour, including forcing merchants to choose between the country’s top internet players, a long-time practice in the market. They will also cover payment services like Ant Group’s Alipay or Tencent Holding’s WeChat Pay. The guidelines are expected to put new pressure on the country’s leading internet services, including e-commerce sites such as Alibaba Group’s Taobao and Tmall marketplaces or JD.com. The new rules formalise an earlier anti-monopoly draft law released in November and clarify a series of monopolistic practices that regulators plan to crack down on. With its investments in JD.com and Meili, Tencent will win either way.BEIJING - China’s market regulator released new anti-monopoly guidelines on Sunday that target internet platforms, tightening existing restrictions faced by the country’s tech giants. But it will require the new venture to foster and sustain a thriving, close-knit community inside WeChat, and to immediately convert some of that excitement into sales. Will users really want to purchase via the new venture’s mini-program instead of going to a brand’s WeChat boutique directly? The “brand zone” enables any WeChat user to search a brand and find its WeChat store, regardless of whether the user has already subscribed to the official account (微信公众号). Within just two weeks, 12 high-end brands (including Louis Vuitton and Swarovski) had already registered their official boutiques, and many more will follow. In December last year, WeChat launched a new feature called “ brand zone,” which includes an “Official Boutique” (官方精品店) for each brand. The customer base is absolutely huge on WeChat, with nearly 900 million active users all around the world.Īt the same time, the JD-Meili joint venture faces some fierce competition, which may even come from WeChat itself. ![]() The JD-Meili joint venture will certainly benefit from the relationship with WeChat, which is an increasingly important sales channel for brands, and which possesses an in-built payment system that Chinese consumers are familiar with. Unlike Alibaba’s Luxury Pavilion, WeChat mini-programs aren’t exclusive to members, meaning WeChat user can stay in the app and complete the entire purchase more seamlessly, if with somewhat less social cachet.īut will connecting users on WeChat with an image-sharing and online sales site (aka Chinese Pinterest with Interest) be a success in China’s dynamic luxury e-tail space? Selling on WeChat is becoming increasingly popular among luxury brands, and the joint venture between JD.com and Meili promises to help convert excited discussion on Mogujie and Meilishuo over the latest items into sales. Its backers included Tencent Holdings, GGV Capital, Sequoia China, and BlueRun Ventures. Mogujie acquired Meilishuo in a $3 billion deal in 2017. (Note: JD.com also has partnerships with Walmart and Baidu) It’s like the Avengers, all teaming up to take on Alibaba CEO Jack Ma. The strategy seems clear: to join forces to compete against Alibaba’s Taobao and TMall for a larger share of China’s lucrative e-commerce market. The relationship between JD.com and Tencent grew even closer after the two companies invested in luxury e-commerce platform Vipshop together last month. The two companies also share data to better target consumers. It is also JD.com’s largest shareholder, with a 20 percent stake in the company. Tencent still relies on JD.com for a significant chunk of the transactions made through its payment service, WeChat pay, and is no doubt taken with JD.com’s powerful delivery and logistics system. WeChat’s owner, Tencent, is a major investor in Meili, having increased the stake it already had in Mogujie when it bought out Meilishuo. The decision to establish the venture not as an independent site but a WeChat mini-program shows not only how important WeChat has become, but also how close all three companies have grown. Mogujie is a buyer-based social commerce site focused on women’s fashion in China. ![]()
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