Jack Ma failed to change banks, and he also failed to change Alipay's fate.

If one were to pick the greatest app in the Chinese internet world since 2000, WeChat and Alipay would undoubtedly top the list.

WeChat revolutionized the way people communicate, and based on this, Tencent built a vast commercial empire. Alipay revolutionized the way people transact, leading to the establishment of Alibaba Group by Jack Ma.

The importance of Alipay to Alibaba is self-evident.

In 2022, Alipay upgraded its Life tab to support short video live streaming content. In May of last year, the Life tab was officially opened to individual and institutional creators. By June of this year, the monthly active users of Alipay Life creators had increased tenfold year-on-year, and the average daily number of consuming users had grown eightfold.

Content-orientation is a path that Alipay has resolved to pursue.

While the data looks promising, it appears somewhat underwhelming when compared to competitors. According to 36Kr, Meituan Live's GMV exceeded 2 billion yuan in October last year. Clearly, Meituan Live has been more successful in commercialization.

In fact, Alipay's concern is not with Meituan. Although Alipay's rival has always been Meituan, after years of competition, both sides are well aware of each other's strengths and weaknesses, and thus have their respective boundaries.

The biggest variable may still lie in Douyin (TikTok).

With Douyin's entry, the local lifestyle industry is reignited, inevitably impacting Alipay's commercialization. Alipay now faces the question of whether content-orientation can break through its commercialization ceiling.

This is a question worth delving into.

The essence of content-orientation: tool traffic loses to content traffic

In the battle for local lifestyle, Alipay effectively lost.

In 2020, Ant Group CEO Hu Xiaoming announced that Alipay would be comprehensively upgraded to a digital lifestyle open platform, targeting the local lifestyle sector for a major push.

Subsequently, Alipay underwent a redesign, with food delivery, dining and entertainment, hotel accommodation, movie performances, and citizen center modules being prominently placed on the homepage, leading many to criticize that Alipay was becoming increasingly "Meituan-like".

The "Meituan-ification" of Alipay was actually inevitable.

The commercialization of payments comprises two major segments: finance centered on transactions and local lifestyle services centered on traffic.

The former concerns Ant Group's business. After Jack Ma's Bund speech, for well-known reasons, local lifestyle became one of the few viable options for Alipay's commercial expansion. Thus, the changes in 2022 were essentially seeking a way forward for Alipay's commercial future.

At that time, Alipay had a certain competitive edge in its "Meituan-ification" efforts.

Fundamentally, Alipay's main competitor was Meituan at the time. In terms of on-premises business, both sides had their wins and losses, with the main gap lying in food delivery, where Meituan had more merchants, richer supply, and thus a larger market share.

Theoretically, if Ele.me had put in more effort in those years, engaging in price subsidy wars, it could have regained some market share. However, the problem lay in the rapid changes in the industry.

During the three years of the pandemic, Meituan's superior delivery system demonstrated its immense value, and its vast delivery scale has essentially become the infrastructure for the entire home delivery business. As a result, Meituan captured the minds of consumers.

Ele.me has its own delivery system, but possibly due to cost considerations, its delivery scale is not as large as Meituan's.

Another factor is the rise of short videos, which shifted the center of internet traffic.

The most fundamental logic of internet commerce is traffic monetization, and the way to acquire traffic is through tools or content. Successful commercial platforms in the past were essentially tool-based platforms.

Examples include WeChat, Alipay, JD.com, Tmall, and Pinduoduo, which are all tool platforms.

People have a need for tools, and where there is a need, there is traffic, and where there is a need, products and services can be offered. Simply put, with traffic, one can sell ads or products, earning money either way.

After the pandemic, the advantages of content platforms began to emerge. Merchants suddenly found that their supply was not selling, and there was relative oversupply across industries. At this point, whoever could find traffic dividends could earn money.

Therefore, Douyin and Kuaishou saw opportunities for e-commerce growth.

As Douyin and Kuaishou grew in e-commerce, the commercialization space for tool traffic platforms like Alipay and WeChat diminished.

When tool traffic loses to content traffic, the outcome of Alipay's "Meituan-ification" is evident, seemingly not as successful as anticipated. This led to rumors earlier this year that Alibaba might sell Ele.me to Douyin.

In hindsight, Alipay's "Meituan-ification" was not unsuccessful, but rather too late. If Alipay had redesigned its platform earlier and allowed Alibaba's local lifestyle group to take the lead, the current situation might be different.

Perhaps influenced deeply by Jack Ma, Alibaba people have one thing worth learning: they know how to be flexible and adapt. They won't hit a brick wall before turning back or follow a path blindly.

Since they can't beat them, they might as well join them. Hence, Alipay is embracing content-orientation.

When opening Alipay, the third option in the bottom navigation bar is video, with the first being the homepage and the top navigation bar featuring many services. Upon opening the video page, the first column on the right is Discover, suggesting that Alipay may want to focus on algorithm-based recommendations, following the path blazed by Douyin.

Making videos and aligning with Douyin is not necessarily a bad thing, as it can at least help avoid many detours.

However, the question remains whether Alipay's increasing content-orientation is a good thing.

It's hard to say for sure.

Alipay has always been more "service-oriented," much like Meituan. Rather than being a "traffic entrance," it is more of a "demand and service" entrance.

Therefore, when people open Alipay, they usually have a specific "purpose": to use a particular service.

In contrast, when opening Douyin or Kuaishou, the purpose may not be as strong; it's more about browsing videos and chatting, making them more time-killing apps.

Content-orientation for time-killing apps is not a problem, but it's somewhat counterintuitive for the more "service-oriented" Alipay because services are typically used and then left, not about how long users stay.

From a conversion perspective, when users open Alipay, they often directly use a service, resulting in a relatively short conversion chain that doesn't require content to drive traffic.

On the other hand, content platforms like Douyin and Kuaishou need to import services through content, making the conversion chain longer.

Therefore, Alipay's content-orientation seems a bit roundabout.

Objectively speaking, however, Alipay's content-orientation is limited. The video entry point is not high in the hierarchy, and Alipay's primary function remains transactions, followed by extended services, with content coming last.

In other words, no matter how "content-oriented" Alipay becomes, it's not the "main course," not even a side dish; it's more like a dessert. But for brand merchants, just adding a dessert without changing the main course won't satisfy their hunger.

Ultimately, Alipay's content-orientation may just be a good-sounding story without significant commercial implications.

No turning back from content creation; has Alipay hit its commercialization ceiling?

Alipay has invested considerable resources into content.

In June this year, Alipay announced it would invest "1 billion yuan in cash and 10 billion in traffic" to support content creators and introduce 100 million yuan worth of advertising resources to provide commercial monetization opportunities for creators.

At the time, Li Jun, Vice President of Ant Group and General Manager of the Alipay App Business Group, announced, "Content has become a crucial link connecting users and services, and content-orientation is one of Alipay's keywords for 2024."

Having abandoned the obsession with "socializing" and picked up "content-orientation," Alipay seems to be embarking on a new path of exploration.

Of course, content-orientation as a keyword stems from the need for new changes in Alipay and Ant Group's desire for imagination beyond finance.

Especially after Ant Group's organizational restructuring in March, Han Xinyi, President of Ant Group, had to find the right direction for Alipay.

According to Tianyancha APP, in April, the legal representative of Alipay (China) Network Technology Co., Ltd. was changed from Ni Xingjun to Han Xinyi, who had previously served as Chief Financial Officer of Ant Group before taking on the role of President.

The promotion of the CFO to President sends a clear message: Alipay wants greater commercialization and monetization space, and content-orientation is a crucial part of expanding that space.

The first step was hiring. Since last year, Alipay has recruited a large number of content operation employees from platforms like Bilibili and Xiaohongshu and established an advertising division.

The second step was to launch the "Denghuo" platform to create channels for traffic monetization.

The third step was to cultivate a content ecosystem.

While hiring and creating tools for traffic monetization are relatively straightforward, the real challenge lies in building a content ecosystem.

As a tool platform primarily focused on finance with services as a supplement, Alipay must fundamentally address two issues to establish a content ecosystem. The first is the issue of business focus.

If content ecosystem building is the centerpiece, the current video entry point within the app is still too low in the hierarchy.

Currently, when users open Alipay, the first thing they see is local lifestyle services, and content does not immediately capture their attention. If content's weight is increased, the local lifestyle entry point will be downplayed, creating a dilemma.

Compared to video content, which has yet to form a complete commercialization loop, the local lifestyle entry point is clearly more important. Coupled with the irreplaceable importance of the financial sector, Alipay lacks fertile ground for content creation.

Assuming the entry point issue is resolved, the next question is how Alipay will build its content ecosystem.

In reality, the content sector is not short of players, including Douyin, Kuaishou, Bilibili, WeChat Video, and Xiaohongshu. The difficulties and challenges of building a content platform today are no less daunting than those of building a social platform.

When Alipay embarks on content creation, the most immediate question it faces is what kind of content tone it wants to set.

Douyin has its own content tone centered around people's daily lives, as does Kuaishou, though with a more rustic and down-to-earth vibe. Bilibili and Xiaohongshu's content tones are self-evident as their bread and butter.

As for WeChat, it's a melting pot. Its subscription account content ecosystem is already rich, making the transition to video accounts relatively seamless.

The question arises: how can Alipay build up content traffic without an existing content ecosystem to leverage or a distinct content tone to establish?

This is a question worth pondering.

Currently, Alipay's content revolves around movies, comedy, and daily life, lacking distinctive features, and its traffic is average. Even with a "1 billion yuan" cash subsidy, it may be difficult to attract quality creators.

After all, a content platform without a distinct tone lacks vitality.

Alipay doesn't lack traffic or users, boasting 1 billion users, 800 million monthly active users, and 80 million merchants. Perhaps all Alipay needs to do is provide excellent connectivity and serve as a robust commercial infrastructure. After all, countless people rely on Alipay for payments, and countless merchants depend on it for operations.

Now that management has set the tone for content-orientation, Alipay may have no turning back.

If, after a series of efforts, Alipay's content-orientation fails to significantly raise its commercialization ceiling, what should the future hold for Alipay?

What about the future commercialization of Ant Group?

Perhaps, rationally speaking, content creation for tool-based products is inherently a pseudo-proposition. Rather than striving to be the "second Douyin," it might be more meaningful to focus on refining existing products and services.

Perhaps, the much-anticipated content-orientation is not a path to redemption.

Disclaimer: This article comments based on the company's legally disclosed content and publicly available information. However, the author does not guarantee the completeness or timeliness of this information. Additionally, investing in stocks involves risks, and investors should exercise caution. This article does not constitute investment advice; investors should make their own decisions.