On Saturday’s Singles’ Day, China’s largest online shopping event, Alibaba processed a record-breaking $25 billion in volume, up about 74% from last year. That volume came from 1.5 billion transactions, most of which took place within the first 12 hours of shopping.
And though the lion’s share of spend came from Alibaba, which sponsors the holiday, rival JD.com posted impressive totals as well, as did other leading retailers.
Singles’ Day 2017 gives us two key insights into Chinese payment trends.
- Mobile is even more dominant than it was a year ago. Mobile payments have long been huge in China, with digital wallets seeing $5.5 trillion in volume last year. But they’re continuing to outdo themselves — 90% of Alibaba’s sales were processed via mobile on Singles’ Day, according to PYMNTS. That’s an increase from last year’s 82%, and an even larger one from 69% in 2015, suggesting that mobile volume will continue to rise in China moving forward.
- And Alipay’s influence isn’t going anywhere. China’s mobile payment ecosystem is dominated by two players: Alipay, and Tencent’s WeChat Pay, which together comprise over 90% of the market. Although Alipay used to be the clear winner, there’s been some concern, as WeChat Pay has been eating into that lead. Alipay’s massive lead during Singles’ Day should come as a relief to its supporters, even though it’s imperfect data since the shopping event is affiliated with Alibaba, which is closely tied to Alipay.
More interestingly, the international reach for Singles’ Day could help Alipay figure out its next moves. Singles’ Day is primarily a Chinese holiday. But it gained considerable traction outside of the market this year, with Southeast Asia in particular seeing considerable volume — Lazada, an Alipay-backed platform, grew 171% to hit $123 million in volume that day, according to CNBC.
For Alipay, watching that international performance could be valuable in deciding its next moves. Ant Financial, the wallet’s parent company, is aiming to generate 60% of its volume from international markets by 2026, and as a result, is forming joint ventures in regions like Hong Kong and Indonesia to develop proprietary products in these markets, rather than catering to Chinese tourists. Singles’ Day success could indicate receptiveness to a product like Alipay, and may shed some light on where the wallet might go next.
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- Uncovers the key drivers propelling China’s mobile payments market.
- Identifies which drivers the U.S. can import from China, and which barriers may be standing in the way.
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