A majority of the Walmart hypermarkets in southwest China were found to stop using Alibaba’s Alipay as a payment choice, local media reported.

This came at a time when China’s two tech giants, Alibaba and Tencent, both have been on shopping binges to add brick-and-mortar stores to their shopping carts in a push to digitize physical channels by their advanced internet technologies, further increased their bet on China’s new retail trend. 

Most of the top local retailers have picked up their sides to take, either to side with the Alibaba mafia, such as Yintai and Sun Art did; or to go with the Tencent clan, as Yonghui, Carrefour and Walmart chose.

The Walmart stores discontinued Alipay, the flagship mobile wallet app developed by Chinese e-commerce behemoth Alibaba, spread across Yunan, Guizhou, Sichuan province and the city of Chongqing. Those stores keep WeChat Pay as the only mobile payment option.

The notice by Walmart, stating it stops accepting Alipay.

In a response to local media Linkshop, Walmart China said the company has developed a “profound” partnership with WeChat, Tencent’s super app that runs WeChat Pay. Walmart China also said it plans to roll out special offers for WeChat Pay users – in a way to incentivize adoption – and to enhance its precise marketing based on big data.

The partnership between Tencent and Walmart traces back to as early as June 2016, when the retailer inked a strategic partnership with JD.com, which is the most important confidant for Tencent on e-commerce front.

Mobile Payment Race

China is the world’s largest mobile payment market, topping 81 trillion yuan (approx. $ 12.77 trillion) in the first ten months of 2017. Tencent and Alibaba are going head-to-head in such a huge and still increasing market.

Alibaba’s Ant Financial leads the game with a 53.7% market share in Q3 2017, according to a report by data service Analysys. At the same time, Tencent’s WeChat Pay, launched 10 years later than Alipay, is catching up quickly with a 39.35% market share over the same period, Analysts report states.

Alibaba has previously invested in China’s bike-sharing startup Hellobike through its financial affiliate Ant Financial. As Tencent founder Pony Ma puts it, Alibaba is just leveraging on the bike-sharing startups to promote its mobile payment and has no interests in the bike sharing industry.

Editor: Ben Jiang