WALMART Inc. has placed a bet on Tencent Holdings Ltd.’s mobile payment system, giving the tech giant a boost in its battle with Alibaba Group Holding for pole position in China’s fast-growing payments market.

Walmart, the world’s largest retailer, said Tuesday it had dropped Alibaba-linked Alipay in all its stores in the western region of the country after agreeing a tie-up with Tencent to use its popular WeChat payment system.

The move underscores how China’s retail market is dividing into two camps around Alibaba and Tencent, tech behemoths worth a combined US$1 trillion who are shaking up online and offline retail markets.

Chinese consumers — and retailers — often have both Alipay and WeChat, which can be used to pay for shopping online or in physical stores by scanning QR codes with a smartphone.

Alibaba is China’s top e-commerce player, while Tencent is strong in social media and gaming and has — along with Walmart — a major stake in No. 2 online retailer JD.com Inc.

A Walmart spokeswoman said the firm had entered into a “partnership” with WeChat Pay in western China, which was a “business decision” to improve customer experience.

“In the future, Walmart will cooperate with more partners to provide payment solutions with more convenience and benefits,” she said, adding the firm accepted payment methods including cash, cards and mobile payments.

Tencent said it welcomed Walmart’s decision and would push forward with plans to help support vendors with digital tools in the “smart retail” arena.

The Walmart move comes after Tencent and Alibaba have between them splashed over US$10 billion on retail-focused deals, boosting their reach offline and meaning few brick-and-mortar sellers are left without an allegiance to one or the other.

(SD-Agencies)