Tech giants have more scope to cooperate than compete: experts
Domestic Internet giant Tencent Holdings on Tuesday linked the WeChat payment function to its App Store, the company said in a statement sent to the Global Times.
The cooperation followed a move by Tencent's U.S. counterpart Apple Inc to block WeChat's cash rewards feature on the iOS platform in April.
Users in the Chinese mainland can choose to link to and use WeChat payments in the App Store or Apple Music before they make a purchase, the statement said. The payment tool now supports users with iOS 10.3 platforms or the latest version.
"I hail Apple's choice to bring WeChat payments to the App Store because the online tool payment will make purchases easier, as an increasing number of Chinese consumers are adopting the function in their daily life," Peng Ziyuan, a 20-something white-collar worker in Beijing, told the Global Times on Tuesday.
According to Tencent's latest earnings report released on August 16, the number of users of WeChat and Weixin has exceeded 963 million. Tencent's social media function is known as Weixin in China and WeChat abroad.
The tie between WeChat payment and the App Store and Apple Music will further "lower the payment threshold for Chinese users," the statement noted.
Liu Dingding, a Beijing-based independent Internet analyst, said that Apple and Tencent's cooperation showed that the two companies have more scope to cooperate than compete.
"In China, consumers can do without Apple mobile phones by switching to other phone brands, but they still can't find a replacement for WeChat. I think Apple has realized this and it doesn't want to lose the resources of Tencent over any issues," he told the Global Times on Tuesday.
"The two companies need each other, particular now when both face a bottleneck as Apple's revenues are decreasing in the Chinese market while Tencent has obstacles exploring the overseas market," Liu noted.
Tension between Tencent and Apple increased in April after Apple banned WeChat's cash rewards feature on the iOS platform.
The feature, which allows users to send tips to their favorite official accounts, was banned on iOS on April 19 because it violated Apple's regulations, according to media reports. It is currently still functional on other platforms, including Android.
Apple required its users to employ the in-app purchase function if they wished to unlock new features within apps.
"The fight between Tencent and Apple is over their interests, and this time Tencent may have made some compromise in business to achieve cooperation," said Li Yi, a senior research fellow at the Internet Research Center under the Shanghai Academy of Social Sciences.
Li told the Global Times on Tuesday that payment habits in China have gradually changed from using credit cards to online payment tools, and the popularity of WeChat would help promote the sales of the App Store.
As one of the leading domestic online payment platforms, WeChat payment may not want to lag behind its rivals like Alibaba Group Holding-backed Alipay, which entered the App Store in November 2016.
According to Liu, Apple and Tencent can cooperate in several areas. "Both Apple and Tencent have invested in the Didi Chuxing app, so they can work together in the online car-hailing sector. Also, the two companies can cooperate in developing mobile games," Liu said.
"In general, Apple needs the social network resources from Tencent. I think it won't be long until the two companies launch a big strategic cooperation," he noted.
Also, Apple's newly appointed chief for China may bring more opportunity for the company's growth in the domestic market, according to Li.
On July 19, Apple Inc promoted Ge Yue to vice-president and general manager of China. Apple is scheduled to announce its latest product, the iPhone 8, on September 12, the Wall Street Journal reported on Monday.