Retail behemoth Walmart has partnered with AliPay, Alibaba’s financial partner, to accept mobile payments in 25 Walmart-owned stores in Shenzhen, China. Customers of these stores will now be able to make payments through the Alipay Wallet app. The service will be expanded across all the 410 stores in 160 cities in China by the end of this year.
When Wal-Mart entered China in 1996, it intended to mirror the US expansion in China, opening thousands of stores across the country. However, stores in some locations failed and had to be closed. The company realized it was aiming to grow too fast in the country. Partnership with AliPay is aimed to help Walmart gain a greater foothold in the country and significantly improve its performance in China. Wal-Mart plans to open 115 new stores across China by 2017 which is only a fraction of the 5,187 it has in the U.S.
To further cater to its mobile customers in China, Wal-Mart will be rolling out an app that enables shoppers to order goods on their phones and either pick them up in a store or have them delivered by Wal-Mart’s employees.
Alipay is the payments affiliate of Alibaba, China's biggest e-commerce company. In response to China's lack of infrastructure such as credit cards to support e-commerce, Alibaba created online payments service Alipay. Alipay handles transactions for Alibaba as PayPal does for eBay. Alibaba’s Alipay Wallet now has more than 270 million active users across 40,000 retail stores in China.
About 40,000 supermarkets operated by 70 retail chains, including Carrefour, 7-Eleven and Auchan, accept the Alipay mobile payment app in their stores in China. Mobile has become a huge focus for Alibaba this year as Alibaba's revenue generated from mobile phones surged to $846 million in the last quarter and as its users are drawn to searching products and making payments through their phones.