Alibaba and Tencent Battle Over Hongbao

Caixin: Not in Holiday Spirit: Alibaba and Tencent Spar over Virtual Hongbao
Internet giants Tencent Holdings Ltd. and Alibaba Group Holding Ltd. have gotten into tussle over the giving of virtual hongbao, or red envelopes.

Giving hongbao to relatives and friends for Spring Festival, also known as Chinese New Year, is a tradition that most Chinese people enthusiastically follow.

Tencent put a spin on the old custom last year, when it allowed users of its popular WeChat messaging app to send each other virtual hongbao that added real money to their bank accounts.

Alibaba also allowed users of its Alipay payment service to give and receive red envelopes online, but the feature was not nearly as popular as WeChat's. Jack Ma, Alibaba's chairman, said this setback was his firm's "Pearl Harbor moment" and called for better defense of what has been viewed as Alipay's territory – mobile money transfers.
This year the two firms are blocking each others' hongbao on their platforms.
Caixin called WeChat and QQ, and both said their refusal to accept Alipay hongbao was fair because Alibaba has a longstanding policy of not accepting payments from Tencent.
"We hope to have cooperation from a fair and mutually beneficial perspective," a QQ spokesman said.

Why did QQ block Alipay hongbao, Caixin asked?

"We'll talk about this after Alibaba lifts its ban on (Tencent) platforms," the spokesperson said.

WeChat's reply was similar.

Alibaba's websites, including the popular shopping sites Taobao and Tmall, do not allow shoppers to use Tenpay, Tencent's payment system, or WeChat to complete transactions.

WeChat, in return, blocks all Taobao and Tmall links. Stores on WeChat cannot accept payments from Alipay either.

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