China's Internet Giants Take Out the GlovesPublished June 27, 2014 by OCR Editor
Tencent is altering its sports lottery payment system to cut Alibaba's mobile payment market share.
As to be expected, sports lottery sales have spiked during the World Cup. In China, a massive sports betting market, the biggest online operators have taken to extreme measures to gain a foothold in the rapidly expanding market of mobile payment.
Tencent Blocks Alibaba Through QQ
For instance, in one end around maneuver, the QQ Lottery, sold
under Chinese internet giant Tencent's hit QQ instant messaging
service, announced a temporary blocking of Alipay, an e-payment
system owned by Tencent rival Alibaba Group Holding Ltd. This
imposed “blockage” serves to prevent QQ social media users from
using Alipay service for their QQ Lottery betting accounts.
Tencent justified the blockage publicly by claiming that Alipay
had inferior service, taking too long to transfer funds to accounts,
particularly during this high volume period of World Cup lotteries
Tencent Scrambling for Cover
The real issue is that Tencent's leading Chinese internet company is in danger, with Alibaba set to proffer a record-setting initial public stock offering in August.
In the same statement, Tencent further “reassured” the public
that to top off their betting accounts, they can still continue to
use Tenpay, which is the e-payment system owned by Tencent; or
WeChat, Tencent's already established app for mobile messaging.
Whew, what a relief!
In all “fairness,” Tencent did promise to reopen Alipay access to its users once the so-called bug was fixed, to the utter skepticism of experts who doubt the possibility for widespread malfunctions in highly established payment tools.
Alipay denied the validity of Tencent's statement that Alipay was
"endangering users' experience" in any way. Beyond that,
Alipay refused to respond to the transparent message.
Battle for Public Trust
As owners of interests in the booming lottery sales and mobile payment markets, the battleground of public opinion is becoming more and more valuable, as trust in the eyes of the public will heavily influence where users decide to place their bets as well as send their personal mobile communications.
This round seems to favor Alibaba, as Tencent appears to be resorting to desperate measures, appearing fearful and insecure in the wake of Alibaba's imminent public opening.