Alipay, the online payment solution operated by Alibaba’s finance arm, announced yesterday it would resume supporting Mogujie, one of the leading social shopping services in China. One year ago, Alipay cut off support to Mogujie when the latter added a system for online retailers behind shared items to sell goods directly to users.
Founded in 2011, Mogujie started as a Pinterest-like social shopping service, earning commissions on referral traffic to e-commerce sites. But in China, the majority of online retailers are on Alibaba’s Taobao and Tmall marketplace. So most items shared onto Mogujie are from Alibaba and the referral revenues from Alimama, Alibaba’s referral program. That means what they can make is just a fraction of what Taobao or Tmall e-tailers pay for the Alibaba program.
Also, Alibaba didn’t seem happy to see consumers visit social shopping sites browsing goods instead of going to Taobao or Tmall directly when a wave of such sites emerged in China. It was rumored that Alibaba even charged those sites a technical fee for displaying items from its marketplace in 2012.
Trying to get around Alibaba, Mogujie and Meilishuo, another social shopping site that stood out from the crowd of social shopping sites, launched their own marketplaces in late 2013. The two sites now are able to charge transaction-based commissions directly from retailers.
About five months after Mogujie’s marketplace went live, there were more than 2000 stores, with one quarter of the total traffic going to those stores, as reported by QQ Tech (report in Chinese). By the same time, Meilishuo’s had had 1000 stores.
In 2013, after Alipay stopped supporting Mogujie, both Mogujie and Meilishuo adopted WeChat Payment.
It’s as yet unknown why Alipay would resume support for Mogujie. There was a rumor that Alibaba wanted to acquire the social shopping site. Or that it has something to do with the open strategy Alipay announced earlier this year. A series of APIs have been released with which Alipay wants to power all kinds of mobile businesses. Alipay claims it has 80% of China’s mobile payments market. Alipay Wallet, the mobile app of Alipay for both payments and other mobile services, has 190 million users.
Mogujie claims it has 85 million accumulated accounts, with 35 million monthly active users on mobile.