According to estimates by McKinsey, Internet retail sales in China are expected to reach $395 Bn in 2015 three times the total in 2011. China’s internet giants, Alibaba Holding Group Ltd and Tencent Holdings Ltd. seek to be the biggest player in this market. Alipay, a unit of Alibaba partnered with Sina Corp on January 7th, 2014 to launch an online payment service. This move is to compete with Tencent’s successful monetization of WeChat app.
Alipay says that the new service enables users of Sina's Weibo microblog service to make offline and online payments with their Alipay accounts. Last year Alibaba had acquired an 18% stake in Weibo from Sina Corp for around $585 Mn.
About Weibo Payment:
- Weibo users are required to first set it up by typing in their Alipay account name and password. Only a password is needed later.
- Weibo Payment can be utilized for buying items online. It also supports payments at offline retailers who possess Alipay accounts to receive money.
- Payments at offline merchants will be made via QRcode.
- QRcodes will be made available for payments with both Weibo app and Alipay Wallet app.
- Businesses who own Sina Weibo accounts now can accept payments, do CRM & engage their customers with loyalty programs.
- A user can also subscribe to e-coupons or loyalty programs provided by merchants. The Weibo app now holds a place for storing all the offers and loyalty programs.
Chinese vending machine provider UBox, has added Sina Weibo-Alipay payment. The solution will be available first at restaurants and later be introduced to businesses of other categories says Sina.
Sina reported “Our payment and future financial services would be targeted at mobile. 76.5% Weibo users log in Weibo through mobile devices. 88% of Weibo users ever made payments through mobile devices as of 2013. 78.3% of the mobile payment users use Alipay.”
Alibaba Holding Group Ltd is a network of e-commerce B2B businesses constituting an online marketplace, shopping search engine, retail and payment platforms and more. It is led by chairman Jack Ma, whose net worth is $3.6 Bn as compiled by Bloomberg.
If Alibaba is the Amazon and ebay of China (now global) then Alipay is the paypal. It is an online payment services provider founded by the Alibaba group in 2004. Alipay has partnered with some leading Chinese banks including Bank of China, China Construction Bank, Agricultural Bank of China, the Industrial and Commercial Bank of China and Visa.
Alipay provides solutions for Taobao and Alibaba.com along with over 500,000 external merchants for virtual gaming, online retail, digital communications, airticketing, commercial services and utilities fee payment transactions.
WeChat (popularly known as Weixin in China), a social messaging app has registered about 400 Mn users around the world since its inception in January, 2011. The updated version of their app i.e. WeChat 5.0 brought with it new features like mobile payments, a game centre and a sticker store. Users can now make payments through the WeChat application as it enables integration with their bank accounts. WeChat has increasingly offered financial services and is investing more in its e-commerce operations.