Alipay: Chinese star of the means of payment.

Alipay, the most widely used electronic purse in Asia, is strengthening its presence in France and Europe. Yesterday exotic, it now begins to appear discreetly on the doors and shop windows.

The professionals of the hexagon must understand well all the possibilities of Alipay. With its 400 million porters, this means of payment alone accounts for 50% of e-commerce in China. With the number of Chinese tourists increasing by 100% each year in France, this tool represents many business opportunities for merchants and e-merchants.

alipay
A virtual wallet for ultra-simple use

From taxis to water bills, to small traders or even ticketing, both online and in the physical world, few transactions can be made via Alipay. This immense flexibility places the wallet at the heart of the daily life of the Chinese. And this, vertiginous figures in support: more than 176 million transactions per day, with a peak to one billion transactions processed on November 11, 2016, called “Day of the Singles”, great shopping festival orchestrated by Alibaba since 2009.

In mobile application or PC, Alipay is childlike simplicity. To benefit from its functionalities it is enough to register on a dedicated web page or in the app; you will be guided! On the merchant side, the encashment goes through the scanning of a QR code. This activates the virtual wallet of the customer who only has to enter his password Alipay and the turn is played, the sum is released.

In addition to facilitating the payment process in general, the “super” wallet offers and claims, through numerous applications, a real intelligence that allows to calculate the financial health of the user and to know his payment habits. With the scoring obtained, the consumer gains additional advantages, such as the granting of credit in record time ( Zhima Credit and Hua Bei!) Or access to savings schemes such as Yu’ebao which is now the world’s largest liquidity-backed fund with a capitalization of $ 165 billion in 2017. More recently, Alipay has gone even further by integrating into its app a module to help reforest Chinese forests.

Even though few shops or e-merchants offer this method of payment in France, each one takes a closer look, not wanting to miss out on a new clientele that seems happy to spend. It is therefore no longer possible to ignore Alipay in France if we want to conquer not only the tourists but also the 700,000 consumers from the Chinese diaspora.

A major challenge for French merchants

Accepting Alipay for merchants to open up to new customers, it is important for them to measure the changes that result from them. Being, for the moment, a means of payment exclusively intended for Chinese buyers, traders must understand and adapt to the habits and customs of this population and change their logic of sale accordingly. This obviously involves translating the sales site into Chinese, but also by setting up a “click and collect” system allowing users to pay for their purchases on the net and retrieve them in stores. Chinese tourists visit several European countries in a very short period of time, their demands for speed, convenience and uniqueness of offers are key factors for success.

If the user experience is to be seamless , it is also necessary to offer goods and services adapted to this clientele particularly fond of luxury goods. For this industry in particular, accepting Alipay is part of a corporate strategy, because it is necessary to integrate the fact that one opens a door to the gray market or “daigou”  (buying for others in Chinese) – resale in China of goods of luxury goods purchased abroad.

Where the problem is that Alipay is not a payment institution in Europe. In order to be able to exist in Europe and comply with regulations, the company therefore needs European partners enabling it to collect funds on behalf of third parties. This complicates its integration on e-commerce sites. Good news ! Some payment service providers or fintech disruptives are beginning to propose solutions allowing the acceptance of the wallet.

From our daily living expenses to our state of health, Alipay is aware of all the actions and actions of its users. This accumulated information has transformed the wallet into a kind of “Big Brother of modern times”. How will the people react to this situation? How will the new regulations, RGPD type, impact the giant’s business model ? What is certain is that the security and data management issue is present for Alipay.

Alipay to conquer the West!

Forrester recently announced that cross-border e-commerce will increase by 20% by 2022, to $ 627 billion, with China booming.

While Alipay is now widely used in China, it is nevertheless important to point out that a large part of the population has not yet taken the plunge. Traditionally attached to the scriptural currency , of which he is the inventor, the Chinese people is in the midst of transition (55% of transactions in 2013 were without cash, according to some studies). While in the cities the middle and upper classes quickly adopted the wallet, in the countryside, the situation is somewhat different. Indeed, China (about 50% of the population) does not yet have the means to use Alipay which requires the use of a smartphone – expensive (in 2015 according to Nielsen, only 40% of Chinese had a smartphone). Alipay is thus changing the relationship of the Chinese to the hard cash, but the process is long to take place.

Having already conquered more than half of the Chinese population, Alipay has become one of the essential means of payment for European merchants who wish to extend their international reach. But if the wallet represents a significant opportunity for traders, it also involves profound strategic changes. Its hegemony is today indisputable but the road to go is still long to become a means of world payment.

cxoherald

Blogger,Marketer & Entrepreneur

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