All what you need to know about Alipay

Alipay is a mobile payment solution launched in China in 2004 by the Chinese e-commerce giant Alibaba. It is an e-wallet. Alipay has enjoyed unprecedented success and now has the largest market share in China with more than 520 million active users. In China, Alipay has become so popular that even small street vendors accept it. Alipay is therefore used to pay for almost everything in China (Taxi, bills, a meal in a restaurant, street food, brand items in-store or even e-commerce purchases etc...). Payment via the Alipay app is done through the scan of a QR code. Either the customer scans the merchant's QR code, or the merchant scans the customer's QR code. Once the transaction is accepted Alipay informs the customer and the merchant.

A Chinese tourist spends an average of 3400 euros in France. For merchants, Alipay represents not only an opportunity to attract these consumers, but also an opportunity to expand their business internationally through the online platform. More than just a means of payment, Alipay has quickly become an incredible showcase for the influence of brands around the world. Implementing this mobile payment method means opening the doors to a huge market of more than half a billion people.

To develop your business to Chinese customers, it is imperative to understand the Chinese infrastructures and platforms that are adapted to this market. These platforms will allow you to benefit from a considerable competitive advantage over the brands that do not accept mobile payment.

The Chinese are the undisputed champions of online payment consumption. 60% of the country's consumers have used a mobile payment app: either Alipay or WeChat Pay, its largest competitor from Tencent group holding, WeChat, the "super-app" that has recently surpassed one billion users. This trend, combined with a national digital revolution, and the growth of cheap smartphones, have contributed to the development of applications such as Alipay and WeChaT Pay.

The app is linked to the user's bank account. Whether it is the transfer of money between individuals, payment in shops, access to administrative services of all kinds (taxes, invoices, insurance, the post office, etc.) or even bet on the purse, or book at the doctor, the user of Alipay has everything at hand and on a single application. Alipay has become an integral part of the digital environment. Merchants provide customers with a simple QR code that the customer scans to smoothly and quickly adjust their purchases.

Alipay, the leading mobile payments company in China, relegates Apple Pay or WeChat Pay to second place. Partly because the payment method is on a full-fledged application, which allows it to be usable on various other platforms, but especially because Alipay is more suited to local needs with own services integrated into the application. This better understanding of the Chinese market gives Alipay a significant advantage compared to payment solutions such as Apple Pay which does not take into account these Chinese specificities. Alipay is seen by the Chinese population as the most professional payment service. As a result, this application is now used by nearly a third of the population.

Created by e-commerce giant Alibaba, the app was destined for success from its launch. After creating the world's largest e-commerce site with Alibaba, the Chinese giant has made its payment method known by linking it to its online sales platform. Alibaba founder Jack Ma saw Alipay as a growth opportunity. Every day, the platform generates millions of visits, which is why, far beyond a simple payment solution, the service has become a real showcase for shops (including Alipay shop windows). Chinese consumers are also looking at the app to get up-to-date on the latest trends. The brands referenced on it immediately offer significant visibility.

Alibaba Group also holds the record for the largest New York stock market of all time. Thanks to Alipay's worldwide reputation, this payment method is now the largest facilitator of cross-border trade across the globe.Operating with more than 65 financial institutions including Visa and Mastercard, Alipay provides payment services for Alibaba, Taobao and Tmall shopping platforms, as well as more than 460,000 Chinese businesses. Internationally, European merchants are increasingly using Alipay to sell directly to their customers in China, taking advantage of the already established sales infrastructure they offer. In addition to this, Alipay has another significant interest, the payment service offers transactions in 16 different foreign currencies. This represents a boon for Alipay, which is now accessing a growing number of international tourists to China.Alipay and the mobile phenomenonAccording to Statista in 2017, the number of smartphone users in China was estimated at nearly 600 million people. It is the largest number of users in the world.71% of transactions on Alipay in 2016 were on mobile (65% in 2015). The acquisition of smartphones in China has been unprecedented with affordable and qualitative brands such as Xiaomei, or Vivo. This rapid evolution has notably led to the expansion of WeChat and Alipay, which are now mobile digital behemoths.

The most important rule to remember in any project to establish itself in China or reach a Chinese clientele is to take into account Chinese applications. These should not be minimized, but given priority.

With a growing middle class and avid travel destination, international tourism is in full swing among the Chinese. Chinese tourists represent a juicy market of 133 million travellers. Alipay capitalizes on it by making the system available abroad especially in airports, major shopping malls or even in the most luxurious restaurants in the world. All to attract the most expensive Chinese tourists of them. For example, the largest expenditure ever made outside China, via the Alipay app is a purchase of $38,900 in the United States.The 10 favourite destinations outside China where Alipay is used for shopping are: South Korea, Hong Kong, Thailand, Macau, Taiwan, Japan, Australia, Singapore, New Zealand, Germany.

In conclusion, Alipay offers great opportunities for cross border trade, international tourism, as well as for customer loyalty with the development of a digital relationship.

Check out our article dedicated to Alipay and Wechat Pay as well as Wechat.