Rising outbound tourism spurs growth of mobile payments overseas

By Shen Weiduo Source:Global Times Published: 2019/1/29 19:34:42

Merchants at Rovaniemi, Finland use Alipay services to attract tourists in January 2018. Photo: VCG



 

Chinese tourists embrace mobile payments abroad



No matter whether she is having a typical Thai massage in Koh Samui, Thailand, buying a vintage Chanel bag in Nagoya, Japan, or diving on the Mabul Island, Malaysia, Chen Shuyan, a 27-year-old white-collar worker based in Shanghai, found she could pay for almost anything with her phone.

"It feels like I'm still in China, I can use Chinese mobile payments in most places there, which is quite convenient and they do not charge any extra fees, especially compared to several years ago when we could only use credit cards or cash when travelling abroad," Chen told the Global Times on Monday. 

The mobile payment trend has gradually expanded from China to overseas, pushed by China's rising middle class like Chen, who travel frequently to foreign countries and pursue a high-quality travel experience.

According to a report Alipay sent to the Global Times on Monday, mobile payments in the Chinese outbound tourism market saw an increase in both the rate of use and the proportion of transactions in 2018. On their most recent trips overseas, Chinese tourists paid for 32 percent of transactions using mobile payments, overtaking cash for the first time.

Rapid expansion

Prompted by the boom of outbound tourism, Chinese mobile payment platforms are, and will go through, a fast development period in overseas markets, Xue Yong, a Chinese internet industry analyst with International Data Corp (IDC), a technology advisory firm, told the Global Times on Monday.

"Meanwhile, more overseas vendors will adopt mobile payment methods to appeal to Chinese tourists. It's an inevitable trend," Xue added. 

WeChat said in a note sent to the Global Times on Monday that its overseas mobile payment businesses had increased by almost 200 percent in 2018 and now includes more than 49 countries and regions, as of January 24. The payment platform now supports payments in 16 different currencies. 

Meanwhile, Alipay's overseas businesses now covers more than 40 countries and regions, and also offers real-time tax refund services at more than 80 international airports around the world.

WeChat said in the note that they have seen in recent years that foreign vendors are "actively exploring Chinese people's payment behavior and trying to adapt to them."

"Previously, many Chinese tourists asked whether we accepted Alipay or WeChat Pay, and when they heard the negative answer, some of them would directly leave without making any purchases. That's when I decided to try out the new payment methods," Anada, owner of a Thai massage shop in Chiengmai, told the Global Times on Sunday.

Anada said that after adopting Alipay in October, 2018, a peak travel season for Chinese tourists, the number of Chinese customers that visited her shop increased by more than 10 percent, that month.

Nevertheless, Anada said that she still prefers cash, as Alipay will still charge a commission for every transaction she makes. "But even if I asked them [Chinese tourists] to cover the commission fee, they would still choose to pay with their mobile apps instead of cash or credit cards," she said. 

"Most massage shops around me have adopted at least one or two of the mobile payment apps to attract Chinese tourists. It's more like an 'advertisement' specifically designed for Chinese tourists," she said.

The aforementioned report, which was jointly released by Nielsen and Alipay, showed that 58 percent of merchants located in areas frequented by Chinese tourists in Singapore, Malaysia and Thailand now accept mobile payments in 2018, with 70 percent of them accepting Chinese mobile payments. 

By comparison, only 12 percent of them accepted Chinese mobile payments in 2016, underscoring the exponential growth of Chinese mobile payments, the report said.

With the approaching Chinese Lunar New Year holiday, which falls on February 5, the number of Chinese overseas tourists is expected to see another boost, which is another good opportunity for the two mobile payment systems to gain a further foothold in the overseas markets.

Domestic online travel agency Ctrip said in a statement sent to the Global Times that the number of outbound tourists is expected to reach nearly 7 million during this year's Spring Festival. Thailand and Japan are among the top vacation choices for the Chinese tourists.

Chinese tourists, who are in pursuit of quality and experience, also have the strongest consumption power of countries around the world, even ahead of countries like the UK, Japan and the US, according to another report from Ctrip. 

Copy the success 

Apart from foreign vendors' active participation, Chinese mobile platforms are also ramping up efforts to expand their footprints in foreign countries and regions.

For example, both Alipay and WeChat Pay offer random red packets for users overseas. 

Starting on Monday, if tourists pay through WeChat outside China, the amount of a red packet, or price cut, could reach as much as 2019 yuan, according to a post on WeChat's official account.

WeChat said it aims to "plough deeper" into the Asian markets and will focus more in the European market in 2019. "We wanted to copy China's digital experience in other parts of the world."

Meanwhile, Alipay is eyeing more than just Chinese tourists. It has been cooperating with local partners since 2015 to promote China's model of mobile payments and hopes to "share its experience and technology in that area" with other markets around the world.

Alipay told the Global Times that it has formed nine strategic partnerships with local partners outside the Chinese mainland to further promote mobile payments in these countries. 

For example, it cooperates with local partners such as PayTM in India and TrueMoney in Thailand to localize its services and woo more local customers instead of just Chinese tourists. Together with its global partners, Alipay now has over 1 billion active users worldwide.

The Nielsen report showed that with the increasing popularity of Chinese mobile payments, local vendors also expect Chinese mobile payment products and technologies to serve people other than Chinese tourists, including non-Chinese tourists and local residents. 

They believe that this will help expand the local mobile payment industries, enabling more tourists and local residents to use and benefit from mobile payments.

However, Xue cautioned that for emerging markets including Southeast Asia, India and Latin America, which are similar to China's situation, it might be easier for them to skip the credit card usage period and directly move into the mobile payment era. 

While for developed countries like the US and UK, most people are still accustomed to paying with credit cards, and this practice is so long established, it will be hard to change the thought process in the short term.

By far, the mobile payment process is mainly limited to Chinese communities, irrespective of whether it is in China or other countries, Xue said.

"I'm afraid that Chinese mobile payment apps might not achieve as much success in the UK or even across Europe, as they have in China, as credit cards have been embedded in our [UK's] consumption behavior, for so long, and thus people's thinking might be hard to change," a Beijing-based white-collar worker from the UK, told the Global Times on Monday. 

 "Chinese mobile payment systems will also face stiff competition from their Western counterparts such as Apple Pay and Paypal when foraying into the international markets," Xue warned.

Xue said Chinese mobile payment platforms have great advantages - the largest user base in the world and rich operational experience, while if they want to expand the payment model to the world, they need to do more research on local customers, think more about localization strategy. 

"This confirms the old saying 'know your market,' " Xue said.

 
Newspaper headline: GOING ABROAD


Posted in: COMPANIES,BIZ FOCUS

blog comments powered by Disqus