Foreign media: Competing China's trillion-dollar payment market | Tencent will defeat Ali


According to foreign media reports, although Tencent still lags behind Alipay in the market share of mobile payment services, analysts said that as e-wallets continue to replace bank cards, they become the favorite of smart phone users. Payment method, Tencent has greater potential in the rapid growth of mobile payment services.

At present, Alibaba and Tencent have already begun fierce competition for China’s multi-trillion-dollar mobile payment market dominance. This battle has reached a critical point. There are signs that Tencent has already begun to lead.

Although Tencent is lagging behind Alibaba in entering the mobile payment market, it has steadily weakened its rival's leading position for several years. Although Tencent still lags behind Alipay in the market share of mobile payment services, analysts said. As e-wallets continue to replace bank cards as a favorite payment method for smart phone users, Tencent has greater potential in the rapid growth of mobile payment services.

Bundle WeChat

Tencent’s success in mobile payment is attributed to its popular instant messaging app WeChat. Currently, WeChat has 1 billion users. By integrating functions such as online shopping and mobile payment into applications, the average user needs to use WeChat on a daily basis. The platform spends an hour sending messages or reading news, and there is no reason to abandon the WeChat platform and related services. Zhang Yu, an analyst at iResearch, a Beijing-based market consultancy, estimates that 80% of WeChat users have tried One of the mobile payment services TenPay. Tencent announced in the fourth quarter earnings report last week, now TenPay's number of active users has exceeded Alipay's 450 million.

According to Zennon Kapron, founder of KapronAsia, a Shanghai-based financial technology consulting company, “The challenge that Alipay faces is always to connect with consumers. Generally speaking, as a Chinese consumer, you will often use WeChat, while in-app The payment function is more convenient and normal for people.

This led to the rapid growth of Tencent’s market share in the mobile payment market. In the third quarter of 2017, China Mobile’s payment market increased by 28% year-on-year to US$4.7 trillion, of which Alibaba has a 53% share. According to the Beijing-based market consultation According to the company Analysys International, Tenpay followed with a 40% market share. According to Analysys International, this is a retrogress to Alipay, as it occupied 70 percent as early as 2014. % of market share.

Of course, Alibaba is not without its own advantages. With the help of its financial services company Ant Financial, the company has established partnerships with restaurants and retail chains (such as Yintai and Suning), and PayPal deserves to be the user's primary payment option. Consumers will make more mobile payments when they buy clothes, order meals or purchase electronic products. This helps Alibaba to make up for the lack of users by increasing the volume of transactions. Ereli Consulting analyst Zhang Yu said that Futong is also widely used by small stores such as convenience stores because its business registration process is usually faster. In addition, the two companies are competing to establish partnerships with big-name retailers. Wal-Mart recently abandoned Alipay in the Chinese market and adopted WeChat. system.


Illustration: Alipay launched a massive marketing campaign

Alibaba and Ant Financial are investing huge sums to recover lost land. Since last December, Alipay has set aside RMB 1 billion for marketing. Consumers can even use Alipay’s mobile payment service to earn up to ten yuan. The cash rebate reward, which will also induce consumers to use Alibaba's mobile payment service more frequently.

Greater potential

But Alipay can only do so much. The digital payment platform has long been popular in big cities like Beijing and Shanghai, and its future business growth will come from more remote areas. But analysts say Tencent is trying to attract more New users.

This is mainly because users outside China's big cities are even more reluctant to leave WeChat to download Alipay. Although Alibaba controls 80% of the e-commerce market, unlike residents in more developed regions, residents outside big cities do not often use Ali. Baba’s online store will not use Alipay as the default payment method. Steven Zhu, senior analyst at market consultancy Pacific Epoch, said that when online shopping is less common, local residents will use WeChat as a chat and daily shopping service. Station platform.

'Compared to Alipay, they (Tencent) will have stronger growth potential, and Alipay is actually only expanding together with e-commerce,' Zhu said. 'When we talk about the future direction of the Chinese market, its advantages will tilt to WeChat. . '

For example, Chen Aiyun, a 30-year-old woman living in Liaocheng, Shandong Province, said she does not think it is necessary to use Alipay. Chen uses WeChat to socialize and buys daily necessities at convenience stores. When she is shopping online, she will mainly support the cheap products supported by Tencent. Shopping platform to buy goods.

'I just don't want to download other payment applications,' Chen said. 'It's a lot of trouble. It will take up space on my phone.'

Profit pressure

It is not all good news for Tencent. In order to attract users' attention, the company has no choice but to keep up with Alipay's marketing investment. The company’s executives said at last week’s earnings conference call with other content. With investment in technology, this will put pressure on Tencent’s profit margins. This news has caused Tencent’s share price to fall by 4.8%.

Natural investments also pay off. By attracting users to use their own mobile payment services, Alibaba and Tencent both obtain more financial data and assess their reputation accordingly. These initiatives paved the way for more services such as online loans and insurance. The algorithms of these companies provide users with tailored financial products by mining data and credit records.

The related business has grown rapidly. Tencent stated that the total outstanding loans of the company's emerging loan services last year have exceeded 100 billion yuan. And Ant Financial's money market fund balance Bao (users can directly through Alipay investment, with a fixed annual investment of 3,000 US dollars Calculating, the annual rate of return is about 4%. Currently managing 160 billion U.S. dollars, it also makes it the world's largest currency fund.

Kapron, a market consulting firm KapronAsia, said: 'The data obtained from the platform has many opportunities and values. People will focus on this in the next few years.'