China's internet giants must step up opening their 'walled gardens', state media says, ahead of Tencent flagship game's return to Douyin

China's internet giants must accelerate efforts to open up their "walled gardens", enabling their ecosystems to work across platforms as a means "to face market pressures together" and assure the industry's further expansion, according to state-owned media.

At present, collaborations among these companies "are far from deep", said an article published on Tuesday by Shenzhen-based Securities Times, a financial newspaper owned by the Chinese Communist Party mouthpiece People's Daily.

The call to break more digital barriers in China's internet industry comes days before Tencent Holdings' Honour of Kings, the world's most popular mobile game, officially returns to the popular live-streaming platform of ByteDance-owned Douyin, which has more than 600 million daily active users, from January 21.

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"In the future, internet companies need to be more open-minded and inclusive to promote truly win-win cooperation in the industry," the Securities Times article said.

Increased collaboration between China's major internet companies are expected to not only benefit consumers, but help further expand the industry, according to state media. Photo: Shutterstock alt=Increased collaboration between China's major internet companies are expected to not only benefit consumers, but help further expand the industry, according to state media. Photo: Shutterstock>

The collaboration between ByteDance and Tencent comes amid the video gaming industry's regulatory uncertainties and a weaker macro environment in China.

While China's gross domestic product rose by 5.2 per cent year on year in 2023, the world's second-largest economy still faced mounting concerns this year including waning investor confidence, a protracted property market slump and a weak private sector.

"Internet companies need to leverage each other to face the market pressures together," the Securities Times article said.

TikTok owner ByteDance earlier this month confirmed that it was in talks with multiple potential buyers, including Tencent, to sell its video gaming operations.

Last April, Tencent and Douyin agreed to a partnership in video content distribution after years of contentious copyright disputes.

Under that deal, Tencent authorised Douyin to distribute its video content and clarify copyright rules for users to produce modifications and adaptations. As a result, users of ByteDance-owned platforms Douyin, Xigua Video and Jinri Toutiao will be able to produce derivative works based on Tencent-owned videos.

There have been other cases of collaboration between rival internet platform operators over the years,

In November, Alibaba Group Holding's grocery chain Freshippo opened a store on rival e-commerce giant JD.com. Alibaba owns the South China Morning Post.

Tencent's super app WeChat and Alibaba's Taobao and Tmall Group in September announced an expanded collaboration, which enabled users who click on advertisements on WeChat to be directed to shops and live-streaming campaigns on Taobao and Tmall.

In November 2021, Tencent opened WeChat to third-party online links including those of Douyin and Taobao.

In September that same year, Alibaba started allowing consumers to use Tencent's WeChat Pay as a payment option on a number of its platforms including food delivery platform Ele.me, video-streaming platform Youku, online ticketing platform Damai and cross-border e-commerce platform Kaola.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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