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E-Commerce

Better Life Breaks Away From Alipay Following Walmart

Mar 30, 2018 by Yun Nie
Better Life Breaks Away From Alipay Following Walmart

Can you envisage a scenario where you cannot pay through Alipay for your online shopping? For most Chinese people the answer is a resounding NO!

A recent report has revealed that supermarket Better Life, whose parent company is Better Life Commercial Chain Share Co. Ltd., following in Walmart’s footsteps has refused Alipay as their payment portal, creating an obstacle for Chinese consumers who heavily rely on this third-party payment platform to purchase daily commodities.

After the news made it to the media last Friday, Better Life Commercial Chain Share Co. Ltd. responded that they have not completely shut off Alipay, “we still have a few offline supermarkets that accept Alipay in the pilot stage.”

Better Life or Alipay, who will win the debate?

The disappointing results of their collaboration might lead to bitterness between the once-partners.

The supermarket company indicated that their refusal to allow Alipay in their stores is the consequence of Alipay’s “unfair partnership practices”.

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The manager said, “in our collaboration with Alipay, they (Alipay) could get their desired data from us, while we (Better Life) were refused access to their database leading to security concerns about our information and increasing the danger of it being stolen by competitors”.

A report in firefoxchina.cn seems to prove correct Alipay’s autocratic rule.

Based on the report, consumers are not allowed to pay directly via Better Life’s own payment system, 52bill. Rather, they have to use Alipay first and then transact the deal through 52bill or other systems, making Alipay the primary beneficiary of the data flow.

“We feel let down by a partner who seems uninterested in an interactive collaboration. We do not see mutual gains in associating with Alipay,” the manager said.

Alipay has been silent on this matter, but according to an insider, Better Life’s 52bill service has not been granted the official license by Central Bank of China, which means that the service itself, as well as the company’s collaboration with Alipay, might be illegal.

Alipay’s loss is Tencent’s gain

This is good news for Alipay’s biggest rival, Tencent and a double whammy to Alipay. Just before Better Life Commercial Chain Share Co., Ltd. jumped ship, Walmart pulled out of talks to use Alipay’s service and teamed up with Tencent a week ago, thereby crushing Alipay’s efforts to dominate the Chinese western market, including Yunnan, Sichuan, Chongqing, and Guizhou provinces.

Walmart announced that they called off their association with Alipay because all their stores in these regions entered into a long-term partnership with WeChat - Tencent’s most prominent app offering a variety of services.

Furthermore, the two companies have come to an agreement on providing exclusive discounts and collaborating on precision marketing based on Big Data Analytics.

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The Chief Public Relation Officer (CPO) of Tencent, Zhang Jun tweeted that all third-party payment platforms are only service providers and supporters who have no right to interfere in their partners’ decisions and agenda.

“Which services should be chosen, whether to start the service, and how to get the service rolling – all this is under the control of our cooperatives, not us, which requires minute negotiations.” Zhang Jun wrote.

In recent years, the competition among mobile payment platforms has become increasingly fierce. Corporations in the Alipay camp fail to support WeChat payment, while allies of Tencent like Walmart and JD.com called a halt to Alipay despite building a close relationship with it.

Although Ma Huateng (or Pony Ma), the founder, chairman and chief executive officer of Tencent, said in the conference that rivalry is “the impetus for a thriving market and future development”, this “either-or” model has resulted in widespread unease in China.

Chinese consumers now are struggling to protect their right of free choice.

Some consumers in Walmart said, “I feel like my rights have been deprived of by these tech giants. I still have a large amount of money in my Alipay account, and it is a shame that I cannot use it in Walmart. Other supermarkets, after all, accept both Alipay and WeChat pay, but not Walmart.”

“I was shocked. Imaging spending time and energy to select your items, and finally not being able to pay for these commodities. This happened to me! The only thing I could do is turn back with an empty shopping bag.”

Yun Nie

Yun Nie is a New York-based tech reporter. She focuses on India-China financial market, global IT giants and technology-centric market trends. She can be reached at Yunnie@thepassage.cc.

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