Key Trends In The Growth of Payments In China
China’s eCommerce market is expected to record a compound annual growth rate of 23% through to 2020.
China’s movement from being cash dominated straight to mobile payments has been attributed in part to the late mover advantage. Since China does not have an entrenched credit card culture, the jump from cash to mobile was much easier. Mobile is now accepted as an everyday transaction method.
For businesses wanting to take a share of the options associated with the rise of mobile as a payment method through which to pay, the Chinese market represents a great opportunity. With a phenomenal eCommerce growth rate of 63.2%, mainly as a result of a higher adoption of digital payments initiatives in rural areas and a shift from cash to mobile payments, and around USD$300 billion worth of online sales, China is a formidable market.
Furthermore, with the number of people in China using their phones to pay for goods and services at the point of sale doubling last year, it is expected by 2020 that half of all of China’s smartphone users (an estimated 350 million people) will use mobile payments. Thus, the Chinese commerce market represents a great chance for SMEs wishing to tap into both global expansion (especially Asia) and take advantage of mobile payments.
In particular, the rise of Alibaba’s Alipay and Tencent’s WeChat Pay, which are both able to settle transactions in more than 10 currencies and are now in the business of global expansion, represent a great way for businesses to take their first step into the Asian market.
Why should you offer mobile payment methods?
Mobile payment platforms can lead to increased consumption not only in eCommerce, but also in offline retail. By integrating online mobile payments with offline purchasing experiences, convenience and overall consumption is increased. This results in additional growth for your business.