Soft toys promoting QQ.com, operated by Tencent Holdings Ltd, are displayed as attendees arrive for a Tencent news conference in Hong Kong, March 22, 2017. [Photo/VCG]

Platform now has 938m monthly active users

Chinese online gaming and social networking group Tencent Holdings Ltd is giving its once-dominant archrival Alibaba Group Holding Ltd a run for its money in the battle for market share in the nation's lucrative mobile payment sector.

WeChat, the all-in-one super app, which offers a platform for everything from money transfers to taxi hailing and buying coffee, has garnered 938 million monthly active users, according to Tencent's first-quarter financial report released on Wednesday, doubling and eroding the customer base of Alipay, which Alibaba launched in 2004 to facilitate payments on its Taobao e-commerce platform, and the country's top payment tool by market share.

The company reported profit of 14.4 billion yuan ($2.1 billion) in the first quarter of this year, a record high for Tencent's quarterly earnings. Revenue soared 54.8 percent to 49.6 billion yuan.

With its gaming business accounting for 70 percent of its revenues, Tencent said social and other advertising revenue grew 67 percent year-on-year to 4.38 billion yuan during the period. Payment and cloud services, which are identified as "other revenue", enjoyed an impressive 224 percent growth, Tencent said in a statement without disclosing separate figures.

Analysts said that Tencent is smartly leveraging WeChat to drive the uptake of WeChat Pay, making it an integral part of people's daily lives.

Alipay's strength in the early days of its development was its relationship with Alibaba-owned e-commerce platforms Taobao and Tmall. But now Tencent has responded smartly with a concerted effort to partner even with the smallest bricks-and-mortar stores, said Mark Natkin, founder and managing director of Marbridge Consulting.

"For many people, logging into WeChat is the very first thing they do in the morning and the last thing they do at night. Gradually, Tencent has added new features to the original core function of messaging, which, from the perspective of users, are consistent with the app's positioning," he said.

WeChat Pay commanded 37 percent of China's booming mobile payment market at the end of 2016, up from 21 percent just a year earlier, while Alipay's market share fell from 68 percent to 55 percent during the same period, according to consultancy iResearch Consulting Group.

"Alipay does have advantages in other aspects of online financial services, such as money market fund. But in the absence of social elements, Alipay has yet to figure a way out of the mobile payment puzzle," said Li Chao, a senior analyst at iResearch.

Alibaba reported its fourth-quarter revenue on Thursday.

Alibaba's total revenue rose about 60 percent to 38.58 billion yuan in the quarter ended March 31. Net income attributable to shareholders rose to 10.65 billion yuan from 5.37 billion yuan in the year-earlier quarter.