JD terminates link with Weibo

Domestic online shopping platform jd.com will terminate cooperation with the country's popular social networking service Sina Weibo by the end of September, and consumers will be unable to login to the marketplace via their Weibo accounts, the e-commerce retailer said Sunday.

"Given that our partnership with Sina Weibo will expire soon, we expect Weibo users to apply for accounts on jd.com so as to continue their online purchases. Their previous buying data will be preserved in the new accounts," a PR representative from JD who asked not to be named told the Global Times Sunday.

Analysts attributed JD's decision to the recent deals between Chinese e-commerce leader Alibaba Group and Sina Weibo.

After acquiring an 18 percent stake in the social networking service for $586 million on April 29, Alibaba announced to link Weibo's user accounts with its two online shopping platforms - taobao.com and tmall.com, from August 5.

Due to its competitive relationship with Alibaba, JD is unlikely to carry on its cooperation with Sina Weibo, Wang Tingting, an industrial analyst with consulting firm iResearch, told the Global Times Sunday.

The move marks intensifying rivalry between the two e-commerce platforms. Earlier in 2011, JD stopped using Alipay, a third-party payment service developed by Alibaba.

Wang also gave another reason behind JD's move to cut its link with Weibo.

"Weibo has yet to work out a mature business mode for growing the consumer base or increasing transactions of e-commerce platform operators significantly. Therefore, JD might have chosen to end this low-benefit cooperation," he noted, noting that JD still needs some three years to make a profit.

The PR official from JD agreed that the number of consumers gained through Sina Weibo is very small, suggesting that this move will not influence JD's future business.

The company mainly relies on its own services and pricing to attract consumers, instead of cooperation with social networking sites, said the official. JD currently has more than 100 million users, he revealed.

But Wang said that as the era of attracting consumers with low prices is over, and social networking sites are likely to become another important way of channeling potential consumers to e-commerce platforms, though the effect is hard to predict.

Out of data security concern amid fierce competition, JD also severed links with Tencent's third-party payment platform tenpay.com recently, Chen Shousong, a Beijing-based independent e-commerce analyst, told the Global Times Sunday.

Shenzhen-based Tencent provides e-commerce services via buy.qq.com and yixun.com.

Data from iReseach showed that Tmall led the e-commerce sector with a 50.8 percent share of domestic online shopping transactions in the second quarter, followed by JD with 17.1 percent and Tencent with 5.6 percent.

JD said in a statement e-mailed to the Global Times Sunday that the decision to end cooperation with tenpay.com will not affect payments as buyers could finish deals through other channels like online banks.