In China the use of WeChat – WeChat Pay and Alibaba – Alipay are extremely common. They are part of the daily life. That’s been a few years that they are unavoidable. But this fact is only true for China. Both company are trying to reach other countries or even other continents.
What is the actual situation of WeChat – WeChat Pay?
Since 2015 we can use WeChat Pay in Italy. Indeed, the Italian merchants give the possibility to the Chinese customers to pay through WeChat Pay. It is exactly the same process as the one used in China. The merchants have provided a barcode that the Chinese customers have to scan to pay. It seems that WeChat Pay is available in more than 50 locations in Italy. Either in fashion or luxury brand shops, in the hospitality industry and also other retail companies.
Besides, with the recent news, we were able to witness the launch of WeChat Pay in Cape Town (South Africa). It seems it is not a big success at the moment. They have launch it not for Chinese people but for locals. They tried to promote it with some discounts to make them use the APP. Other than the discount, the locals do not know very well the APP and its use. At the moment WeChat Pay is working with Standard Bank.
What is the future situation of WeChat – WeChat Pay?
WeChat Pay will extend its services to another country. This country is the UK. They have linked up with Tramonex, a British payment company. Tramonex will help to integrate the WeChat Pay’s payment infrastructure with the British retailers.
We can be sure that they will not stop with the UK. Indeed, if we listen to what Andrea Ghizzoni the European director of Tencent said: “In overseas markets, like Europe, we will keep focusing on the development of services to best serve EU companies interested in leveraging digital channels to foster business opportunities with Chinese customers”. Later they will also target France and Germany.
Regarding the situation of WeChat in general, it is a more complicated. They can have more than 800 million users in China, they do not success to increase significantly the number of users outside of China. It can be explained because it is quite hard to make the decision to use a new social platform when you know that your friends do not use it.
As we can see, WeChat – Tencent, is helping the local firms to get the Chinese customers when they are going abroad.
Moreover, we have recently witnessed a big move from Tencent. They have invested 1.4 billion USD with Microsoft and eBay in Flipkart, an Indian ecommerce marketplace to compete with Amazone and maybe also Alibaba. Tencent’s investment is considered as a help to link social networking and ecommerce
What is the actual situation of Alibaba – Alipay?
Alibaba – Alipay was the first one to try to reach the European market. That has been already two years they are working in the UK and during that period of time they linked up with several big European banks such as BNP Paribas, UniCredit and Barclays. Moreover, in the UK, Alipay is available in many luxury stores and brand retailers such as Harrods in London.
It is interesting to know that Alibaba is getting quite well outside of China. Their international commerce in 2016 was more than 7.5 billion CNY (7.5% of their total CNY revenue) and more than 1 billion USD (7% of their total USD revenue). They had an increase of more than 18% with 2015.
Moreover, they are getting more and more present in South East Asia. We can see that AliExpress is starting to catch up with Amazone whom is declining since April 2012 in Indonesia. One year ago (April 2016) Alibaba bought a controlling stake in Lazada. This ecommerce platform is backed by Rocket Internet. And we can see that this platform is quite booming since a few years. They have also announced that they are going to develop an ecommerce hub in Malaysia with the Malaysia Digital Economy Corporation (MDEC). They have also recently opened a Taobao Collection in Singapore.
What is the future situation of Alibaba – Alipay?
In one hand, regarding the South East Asian markets, with the purchase of shares of Lazada and the launch of Taobao Collection in Singapore, their future should be promising. On the other hand, with the European market, if they keep doing the same and maybe start to target other countries or strengthen the one they have at the moment, it can only be positive for them.
Moreover, they are quite famous in South East Asia because of:
- South East Asian countries are facing the same challenges that China ten years ago. A growing economy and a lot of logistics/payments issues.
- South East Asia is still open not like the U.S.A where Amazone has a total domination of the market.
- It is easier to make people use/try an ecommerce website.
Alibaba is targeting South East Asia where the customers are starting to face some international expansion.
What is your next step?
If you use WeChat Pay or Alipay you will be able to use them out of China as well and maybe in a few years in even more countries. If you want to have more information about this subject or even others, do not hesitate to contact us.