Alipay, WeChat Pay Enter Southeast Asia and Local Mobile Payment Market

4 min read 

Ant Financial announced in Hong Kong that four local wallets in Hong Kong, Thailand, India and the Philippines – Alipay HK, Paytm, GCash, and Truemoney – participated in the Double 12 Shopping Festival for the first time.

Ant Financial launched Alipay HK, which supports Hong Kong dollars, in Hong Kong in May. The number of users exceeded 100,000 within two weeks. Alipay HK quickly launched other services. Through Alipay HK, users could pay electric charges for Hong Kong Electric Company; get access to Guantang Baoda Market; and access taxi hailing services. Alipay HK also announced that users could buy subway tickets by scanning the code with Alipay HK in mid-December.

Giants are Fighting in Southeast Asia

Ant Financial has accelerated its deployment of local wallets since earlier this year. It launched mobile payment systems in Thailand and the Philippines. According to Ant Financial, they company has entered 10 Southeast Asia and South Asia countries, including India, the Philippines, and Thailand, since 2015 by means of strategic cooperation.

“People in the Guangdong-Hong Kong-Macao Greater Bay Area enjoy more advanced mobile life than those in other bays. This is the future we see in Thailand, the Philippines, India and other regions. Alipay HK is an example of the world’s local wallet,” said Douglas Fagan, president of the international division of Ant Financial.

In 2015, Ant Financial launched two rounds of investment in Paytm, India, and provided technical expertise to help Paytm improve its platform’s capabilities. In 2016, Ant Financial made a strategic investment in Ascend Money, created the Thai version of “Alipay” Truemoney by exporting technology and experience and introduced Truemoney into Alipay’s global payment system.

In order to expand its presence in Southeast Asia, Tencent purchased Thailand’s Sanook.com late last year and rebranded it as Tencent Thailand. Since then, Tencent has been gradually infiltrating other parts of Thailand. In July, Tencent told the media that it was applying for a payment license in Malaysia, hoping to offer WeChat payment there. If all goes well, Malaysian users can bind their bank accounts directly to WeChat and pay in ringgits when buying goods and services.

The next step after entering the market is to leverage local users. Ant Financial works with local businesses to export payment technology for local businesses, create local wallets and serve local users in Southeast Asia. In February, Ant Financial announced that it invested in Mynt. Mynt is a Philippine digital finance company that owns GCash, the largest electronic wallet in the Philippines. In October, it launched its scanning code payment function in Manila.

Baidu and JD.com are also interested in the market. Baidu wallet had a pilot test in several stores and restaurants after its launch in Thailand in early April 2016. In July, Baidu reiterated that it has a strategic agreement with PayPal and will jointly explore overseas users.

JD.com, on the other hand, said it wants to enter the Southeast Asian market through e-commerce, and then make further arrangements in the payment area. In November, JD.com Group and Thailand Central Group established joint venture company and will launch an online retail platform for customers in Thailand and Southeast Asia. This platform will export Chinese brand goods to Southeast Asia.

How Big is the Southeast Asian market?

WeChat’s big data report on the National Day Holiday this year found that millions of WeChat users travelled abroad during the golden week, and Southeast Asia was their most popular destination. Statistics released by Alipay showed that the time people spent using Alipay overseas rose by more than seven times during the Golden Week. The per capita consumption amount is 1,480 yuan. About 3.7 million users use Alipay to find local entertainment and discount information while abroad.

According to McKinsey, the current market for e-commerce in Southeast Asia is about US $50 billion, but that number could double by 2025. Mobile advertising spending in Indonesia, Malaysia, Vietnam, Thailand, the Philippines and Singapore is expected to reach US $1.4 billion in 2018, and more than US $2 billion in 2020.

Tencent said it chose Malaysia as a pilot for WeChat because Malaysia has a large Chinese community. In 2016, about 24 percent of Malaysia’s population was Chinese, according to the Malaysian Statistics Bureau. According to foreign media, Malaysia still has the highest network penetration rate in Southeast Asia, with about a third of its people using e-commerce for shopping.

However, a mobile payment insider said it’s only Chinese tourists and local Chinese residents who use mobile payments in Southeast Asia. Mobile payment is still in its infancy in Southeast Asia, and local residents are more used to spending cash. These are the difficulties for mobile payment to seize the Southeast Asian market.

This article originally appeared in Yicai and was translated by Pandaily.
Spread the love
  • 1
    Share
12 comments Add yours

Leave a Reply

Your email address will not be published. Required fields are marked *