Alipay, owned by Alibaba was launched 12 years ago and has since grown to have over 400 million users. It processes over 80 million transactions per day in a Chinese mobile payment market valued at approximately $90 billion.
Another important player in the market is WeChat, owned by Tencent. It processes an estimated 60 million transactions per day and has over 650 million active users.
Apple in China
China is the 2nd largest market in the world for Apple products by revenue, with the first being the United States. In the last quarter of 2015, Apple surpassed Huawei to hold almost a third of the smartphone market and become the most popular vendor in the country. This is a truly remarkable feat, particularly when taking in the consideration the high import prices and luxury nature of Apple products.
Apple Pay ventured into the Chinese market in February 2016. It partnered with UnionPay, china’s bankcard association as will as 19 other local banks which included China Citic Bank, Bank of China and Bank of Shanghai.
China’s consumers have growing concerns about security. Apple storage customer details on their own handset instead of in the cloud, and uses fingerprint scanning to verify purchases. These secure payment features are likely to be very appealing to customers and could give them the edge over domestic ewallets.
Samsung in China
Samsung smartphones are very popular in China due to their lower cost and wide variety of different models to suit individual user needs.
Samsung Pay, however, is only available on its higher end phones, making it inaccessible to many of it’s customers. It would be a smart move for Samsung to launch a new line of smartphones with a lower price point that were eligible for Samsung Pay.
As Apple Pay and Samsung Pay enter the Chinese market, it will be tough for them to compete with domestic tech giants. We predict that the biggest factor in acquiring customers will be the actual payment technology from each provider. Apple and Samsung could gain traction and market share by creating partnerships and alliances with incumbent banks and domestic financial institutions.