Apple adds UnionPay option to China app store

By Zhang Ye Source:Global Times Published: 2014-11-17 23:38:01

Offers more convenient purchasing for consumers




Apple Inc announced Monday that its App Store in the Chinese mainland will now allow payments to be settled via China UnionPay Co's system, aiming to make purchases easier for consumers in the US phone maker's second-largest app market.

Consumers in China can link their Apple ID with a UnionPay debit or credit card for one-tap purchases, according to a jointly issued press release posted on the two companies' websites Monday.

"China is already our second-largest market for app downloads," and now the company is providing users with a convenient way to purchase their apps, said Eddy Cue, Apple's senior vice president of Internet Software and Services, in the press release.

Cue also noted in the press release that the ability to make purchases and buy apps using UnionPay cards was "one of the most requested features" from Apple's Chinese customers.

Before the tie-up, Apple only enabled Chinese consumers to make purchases in the App Store via a top-up system with a 50 yuan ($8.16) minimum value. The UnionPay payment option means that the exact amount of money for each purchase can be transferred directly from a banking account.

"This decision indicates that Apple intends to devote more efforts to the world's biggest smartphone market," Lu Jingyu, an industry analyst with Beijing-based market research firm iResearch, told the Global Times Monday.

As local smartphone vendors are pressuring foreign counterparts in areas such as pricing and hardware development, an improved user experience and diversified apps or contents are features foreign companies can rely on to maintain a strong position in the fiercely competitive smartphone battleground, said Lu.

Beijing Xiaomi Technology Co, which is actively pushing forward its overseas expansion and competing in China's high-end segment, is one of those domestic companies that is posing strong competition for Samsung and Apple.

Data from IDC showed in late October that Xiaomi shipped 17.3 million units in the third quarter of the year worldwide, up 211.3 percent year-on-year, while Apple saw a 16.1 percent growth year-on-year and Samsung suffered an 8.2 percent fall year-on-year in shipments over the same period.

Thanks to its word-of-mouth marketing and fairly good performance overseas, Xiaomi jumped into the top five list for the first time this year as the third-largest smartphone vendor by shipments globally, while Samsung and Apple still ranked No.1 and the No.2 respectively though.

Li Ye, an industry analyst with Beijing-based market consultancy Analysys International, told the Global Times Monday that the introduction of UnionPay, the most preferred payment card by number of users in China, can make purchases at the App Store more convenient and help the company strengthen the loyalty of its Chinese users.

To date, China UnionPay has issued over 4.5 billion cards around the world, and its cards can be accepted in over 140 countries and regions, according to the press release.

However, Lu noted that the offering of the convenient UnionPay option would not likely generate a big growth in Apple's app downloads, especially purchases in China.

"Companies like Apple need more time to educate Chinese customers about buying apps. Most Chinese, excluding gaming enthusiasts, are accustomed to enjoying free app use, as they can find all the commonly used apps on the App Store for free currently," she said.

The purchasing habit can be reflected in a report issued by App Annie Intelligence in October 15. According to the report, China is Apple's second-largest app market by downloads in the third quarter, trailing only the US, while the country ranked third by revenue, following Japan and the US.

Lu also noted that there are still a few online third-party platforms in the market offering pirated apps free for jailbroken iPhones, which hinders the cultivation of Chinese consumers' app purchasing habit.



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