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A payment day in the digital China


Hero webinar payments china Hero webinar payments china Placehoder
10 JUNE 2020

On May 28, Bambora organized a webinar with the theme "A payment day in the digital China". Bambora's Head of Partner Sales Nordics, Emma Wallin, together with entrepreneur Magnus Dettmar did a deep dive into the digital China as well as took a closer look at what a payment day in China might look like. This article summarizes the most important takeaways from the webinar.

Alipay and WeChat Pay

The two major mobile payment platforms in China are Alipay and WeChat Pay. Alipay comes from Alibaba, which is China's counterpart to Amazon whose core business is e-commerce. WeChat Pay comes from the company Tencent. WeChat Pay is a messaging app that is China's equivalent of Facebook/WhatsApp, and has an entire ecosystem of apps in it

Alipay is available in 50 markets and in China they have a 55% market share. WeChat Pay is available in 40 markets and has a 40% market share in China. Alipay is mainly used for e-commerce, while WeChat Pay is used for social media and to send money to each other. Today, approximately 1.2 billion people use Alipay, and 175 million transactions occur every day, that is more than 2,000 transactions every second. WeChat Pay has slightly fewer users with its 800 million users but has a total of 1.2 billion transactions per day, that is close to 14,000 transactions per second.

Singles Day at Alibaba

A major shopping day that originated in China which has now spread around the world is Singles Day. This shopping day is six times bigger than Black Friday and falls on 11/11 every year. During Singles Day 2019, Alibaba sold a total of RMB 268 billion (approximately EUR 34 billion). To reach RMB 1 billion took Alibaba exactly 21 seconds. 90% of all purchases made during Singles Day were made using the mobile phone and this is just one example of the fact that mobile payments are about to take over.

A payment day in China

Entrepreneur Magnus Dettmar lives and works in Shanghai and is part of the digital China. He barely knows where his wallet is because he uses his mobile to pay all the time. On an ordinary day, Magnus uses his mobile phone about 10 to 15 times to pay for everything from food to restaurant visits.

Magnus's payment day already begins in bed when he orders a coffee after he has turned the alarm off. When Magnus comes out of the shower, a hot coffee cup stands outside his door waiting for him. He takes a rental bike to work which he pays by scanning a QR code, as he does for the dumplings he buys on his way to work. To enter the office Magnus shows his green QR code which confirms that he is free from Corona and that he has not been in any risk area, he finds the code in the Alipay app.

When it's time for lunch, Magnus and his colleagues go to the nearest restaurant and scan the table's QR code to see the menu. The food is then ordered in the mobile and paid via WeChat Pay so that everything is paid and ready before the food arrives.

Magnus also uses the mobile in his work. When Magnus communicates with factories in China, they communicate through the app 1688. There they can discuss products, prices etc. When they have agreed on an order, it is sent to Magnus in the app which he then approves and pays for. The factory starts the production and the products arrive to Magnus only 5 days later.

When it's time for dinner, Magnus goes with friends to a restaurant where Magnus takes the bill, and then sends out electronic invoices to his friends. They pay the invoices by clicking and scanning their fingerprint. On the subway, which is paid for by WeChat Pay or Alipay, Magnus realizes that he has not bought any groceries. He opens the Elema app and selects his groceries. Elema has a delivery time of 20 minutes so when Magnus comes home 30 minutes later the food is outside his door. The fact that China has gone from a cash society to a cashless society in a very short time has made everyday life in China much smoother and an ordinary day in Magnus's life is a distinct example of this.

Payment trends in China

China is at the forefront when it comes to almost everything and here are some of the hottest payment trends right now in China according to Magnus:

  • Face-scanning as a payment method - It is becoming increasingly common for merchants to accept payments by face-scanning, today this only works for Chinese people but will soon also work for Westerners.
  • Live streaming - Live streaming has become an extremely large industry in China. It is a new type of TV shop where famous people show, test and talk about different products. Consumers can then click on the product they want and pay for it directly in the app. This is something we see has started to gain momentum in Sweden too, especially during the corona crisis.
  • Social commerce - “Social commerce” is another trend connected to live streaming. This means that customers along with their friends join the same live stream and watch it together. This is like shopping in a store with friends but instead everyone can sit anywhere in the world.
  • Cashiers disappear – The fact that mobile payments take over has meant that more and more stores no longer have cashiers as it is not profitable for the merchants.

Follow Bambora on LinkedIn to stay up-to-date with information on the next webinar.

Watch the recording from the webinar here (only in Swedish)

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