How Alibaba and Tencent went head-to-head in 2013

This past year saw some major competition emerge between Tencent, China’s massive gaming and social networking company, and Alibaba, which is best known for its e-commerce offerings. Below we’ve tracked the progression of both firms throughout 2013 and ask: what’s next?

Alibaba

2013 saw the symbolic end of an era as Alibaba founder Jack Ma resigned from his role as CEO and settled into the position of chairman mid-year. But Ma’s so-called resignation didn’t mean the year would be a quiet one for the company – or for him. On the contrary, 2013 saw the e-commerce firm branch out into a number of different sectors as its rivalry with Tencent grew more heated with WeChat’s tip-toe into e-commerce.

The Weibo bid

The move by Alibaba that drew the most attention from international media was the company’s $586 million purchase of an 18 percent stake of the social network Sina Weibo. This was widely [understood(https://www.techinasia.com/alibaba-jack-ma-confirms-retiring-from-ceo/) to signify Alibaba’s commitment to incorporate more social and mobile elements into its strategy. Consider the possibilities: maybe, in the future, users could purchase directly from Tmall on a brand’s official Sina Weibo page. Think of all the advertising dollars that could pour into Sina Weibo from Alibaba’s relationship with vendors. Think of all the user data Sina Weibo could provide Alibaba to help it optimize sales and marketing. Would the world see a brand-new kickass Sina Weibo that’s strong enough to rival WeChat?

Not exactly. In early August, Weibo started implementing a cards feature that let users purchase from Taobao directly on Weibo. But other than that and some ramped up advertising, little has come from the partnership to date. Sina Weibo as a mobile social network, meanwhile, still feels similar to Facebook for mobile – a little cluttered, a little clunky, and not-quite real-time. If Alibaba hoped to rack up more purchases and collect data from the deal, perhaps the partnership was successful. But if it was looking for a comrade-in-arms to provide a mobile and social boost, thus far, the deal has been quite anti-climactic.

Time to get social

Alibaba also made some other investments in domestic firms with products that tilt towards the mobile and the social. It acquired the music-streaming service Xiami in January, and months later integrated that service with Taobao. It invested $300 million in leading maps app Autonavi, and made two acquisitions – cloud storage provider Kanbox and app analytics provider Umeng (both for undisclosed sums).

But the product Alibaba has promoted the most aggressively of late is Laiwang, its latecomer messaging app. Though the app received little attention from Chinese media and consumers upon its launch in July 2012, Jack Ma made a series of high-profile publicity campaigns promoting the app. Depending on your perspective, Ma’s bold statements could seem either charming or desperate, but they’ve succeeded in drawing at least some attention to Laiwang. The app racked up 10 million downloads by late November, and has skated within the top-20 range for the social categories in the App Store according to App Annie. And unsurprisingly, ads for Laiwang currently plaster Sina Weibo’s mobile app. Of course, it’s David to WeChat’s Goliath, which to date has over 270 million monthly active users worldwide.

Money, money, money

Alibaba also broke new ground in an area not directly related to mobile-social space: payments and personal finance.

Jack Ma has been extremely vocal in expressing his dissatisfaction with China’s banking infrastructure for consumers. The law currently mandates that all state banks set annual interest rates for deposits at 0.35 percent – consumers may as well put their cash under the mattress.

Launched in June of 2013, Alibaba’s wealth management product Yu’e Bao racked up over 2 million users who collectively deposited a total of $1.07 billion dollars in its first month, and by October that figure reached $9.2 billion Offering interest rates that hover around 5 percent, the product is emerging as a desirable alternative to traditional banks.

Meanwhile, Alibaba’s Alipay payment platform has continued to perform strongly. In January of this year it revamped its Alipay mobile app to resemble that of Apple’s passbook, and by November it broke the 100 million registered user mark. It’s zeroed-in on online-to-offline payments, inking deals with convenience stores like 7-11 [and Meiyi](http://tech.sina.com.cn/i/2013-12-23/14369032232.shtml, as well as movie theaters. As an overarching service, Alipay occupies 64 percent of the market for third-party payment platforms as of Q3 2013, according to Analysys. And it’s worth noting that Alipay and the mobile Alipay Wallet both connect seamlessly to Yu’e Bao.

Tencent

What to look out for in 2014