Douyin Launches E-Wallet: TikTok's Chinese Counterpart Expands Fintech

For a long time, Tencent’s WeChat Pay and Alibaba’s Alipay have been the leading digital payment platforms in China, but they have consistently encountered competition. The newest competitor in the online payments sector is Douyin, the Chinese iteration of TikTok.

The short-form video platform has recently incorporated “Douyin Pay” into its existing payment choices, alongside Alipay and WeChat Pay.

According to a Douyin representative, “The introduction of Douyin Pay (Douyin Zhifu) is intended to complement the currently available primary payment methods and, ultimately, to improve the user experience within the Douyin application.”

Introducing a payment system is a logical progression for Douyin, given its expanding e-commerce operations. Viewers may be directed to a product page while watching a video where an influencer is showcasing a product, such as lipstick. They might choose Douyin Pay over the commonly used WeChat Pay and Alipay if offered sufficient benefits.

Other major internet companies, including e-commerce leader JD.com and food delivery service Meituan, have also attempted to encourage users to adopt their own payment solutions, although overcoming the existing market dominance is a significant challenge. Collectively, Alipay and WeChat Pay process approximately 90% of all electronic payments made in China.

Similar to other internet businesses, Douyin’s parent company, ByteDance, secured a valuable payments license through the acquisition of a third-party payments company. In September of last year, a company under the control of ByteDance founder Zhang Yiming completed the purchase of Wuhan Hezhong Yibao Technology Co., a payments solution provider. This license enables Douyin, Toutiao, and other ByteDance services to provide payment functionalities.

For example, users can now receive electronic red envelopes containing money through Douyin promotions and transfer those funds to their bank accounts.

The launch of Douyin Pay appears strategically timed to coincide with the approaching Chinese New Year celebrations, a period when exchanging red envelopes filled with money among family and friends is customary. Over the past ten years, WeChat has successfully promoted digital versions of these traditional envelopes, which contributed to the initial growth of WeChat Pay.

Douyin has established an agreement with China’s central television broadcaster, CCTV, to serve as the technology provider for red envelopes during the Spring Festival Gala, a highly anticipated annual advertising event, as reported by Chinese business news source LatePost. Last year, Alibaba’s competitor Pinduoduo secured a similar arrangement in an effort to expand its own user base for payments.