When platform owners connect with multiple networks, they can build important synergies. Alibaba successfully bridged its payment platform, Alipay, with its e-commerce platforms Taobao and Tmall, providing a much-needed service to both buyers and sellers and fostering trust between them. Alibaba has also taken advantage of transaction and user data from Taobao and Tmall to launch new offerings through its financial services arm, Ant Financial—including a credit-rating system for merchants and consumers. And information from that rating system allowed Ant Financial to issue short-term consumer and merchant loans with very low default rates. With those loans, consumers can purchase more products on Alibaba’s e-commerce platforms, and Alibaba’s merchants can fund more inventory. These networks mutually reinforce one another’s market positions, helping each network sustain its scale. Indeed, even after the rival platform Tencent offered a competing digital wallet service, WeChat Pay, through its app WeChat, Alipay remained attractive to consumers and merchants because of its tight bridging with Alibaba and Ant Financial’s other services.
