With Alibaba making waves in China’s staid financial sector, banks have every reason to be worried. But there are signs that Alibaba is also worried – about Tencent, the company behind the popular WeChat messaging app that is now muscling into the financial space, writes Simon Rabinovitch.

The WeChat challenge is similar to the threat Instagram once posed to Facebook. While Alibaba has been the dominant ecommerce company on PCs, WeChat has made such big inroads on smartphones that it now has the ability to take a bite out of the mobile ecommerce market. “Alibaba’s dominance in the PC era cannot be fully carried over to the mobile era,” says Alex Wang, an analyst at internet consulting group iResearch.

Tencent is waging a multi-front war against Alibaba. In August, it launched a payment tool on WeChat, taking aim at Alipay, Alibaba’s lucrative online payment service. It has also tied its Yixun online shopping site to WeChat, trying to create a mobile alternative to Alibaba’s ecommerce site Taobao.