Category Archives: China

How China’s mobile payment trend is encroaching on foreign markets

Source: TechNode

Chinese consumers spent a total of USD5.5 trillion on mobile payment platforms last year, about 50 times more than American consumers. Between 2013 and 2016, the number of transactions through non-banking mobile apps has increased from 3.8 billion to over 97 billion, with WeChat Pay and Alipay taking over 90% of the market. As a result, these two companies are now taking the fight overseas, from Europe to Southeast Asia.

In Southeast Asia, both Alipay and WeChat Pay have taken the approach of providing subsidies to quickly educate the under-banked population in hopes of quick adoption. On one hand, Alipay has been forming partnerships with local partners to help boost infrastructure and expertise, as it has done with Paytm in India. On the other, WeChat Pay has focused on working with partners in developed markets to expand their market presence. Recent examples of this include partnerships with Citcon and Stripe to allow local businesses to accept WeChat Pay.

Source: A peek into how China’s mobile payment trend is encroaching on foreign markets – TechNode

Alipay integrates with Airbnb to help travelers save up for dream holiday

Source: TechNode

 

Airbnb and Alipay has announced a new financial feature, Travel Deposit, that helps China’s yong travelers to save up for their dream holiday.

After users set the destination location and duration of stay on Alipay, the system shows users the amount of money they have to save, and will transfer the sum to Alipay’s money market fund, Yu’ebao automatically. Users can then share their travel plans through WeChat or Weibo. This is enables Airbnb to engage users even earlier in the vacation planning process, while tapping into social networks to  improve their marketing and distribution channels.

Source: Alipay integrates Airbnb to help young travelers save up for dream holiday – TechNode

WeChat Is Maturing: Leveraging Chinese Social Networks To Grow

This is an interesting post that first appeared on TechNode.

According to Ms. Emmy Teo, CEO of Fashory, the opportunity today lies in being able to show consumers where to buy the things they are interested in, especially if something catches their eye on a TV show. As an example, Fashory has been able to increase traffic and conversions dramatically using a combination of a push and pull strategy, to post content within communities of their target customers, and at the same time, leading interested customers to their WeChat account.

Secondly, marketers should understand the different social networks out there and that each one of them fulfils a different purpose for their target consumers.

Lastly, videos are now a crucial factor to attracting followers. Yoli, an online platform for English learning, regularly posts videos on Weibo to get the attention of their target users. This channel feeds Yoli’s customer conversion funnel, and eventually allows users to convert by registering on their WeChat account.

Source: WeChat Is Maturing: Advice For Leveraging Chinese Social Networks – TechNode

Chinese Consumer Apps Burn Out in Price War

Source: WSJ

The recent Chinese stock market slowdown and slower economic growth have raised concerns over the high case burn rate at O2O startups, resulting in a drop-off for funding for those startups. In the US, similar startups have gained traction due to the convenience that they bring to end consumers. However, in China, consumers are attracted to such services due to the discounts they offer.

Roughly half of the capital raised by such startups typically go toward subsidies for customer acquisition. According to Ken Xu, a partner at venture capital firm, Gobi Partners, 30 to 40 percent of O2O startups have shut down over the past few months.

One car-repair app based in Shenzhen, Xiuyang, shut down in August after being unable to keep up with its competitors in offering discounts and promotions as it ran out of funds, after spending more than one third of its initial capital on customer acquisition.

Source: Chinese Consumer Apps Burn Out in Price War – WSJ

Startup brings one-hour wine delivery to Asian cities

Source: Tech In Asia

Entering the already-competitive market of online-to-offline (O2O) space in China, new wine startup BottlesXO, aims to provide consumers with quick delivery of mid-priced wines in major Chinese cities, with plans for future expansion to other cities in Asia.

The app allows consumers to shop for wines and also suggests food pairings to go along with each bottle. In addition, the app features the history of the type of wine, together with photos and descriptions of the vineyard.

So far, the company operates in Suzhou and Shanghai and has raised a USD1.7 million Series A round. They are preparing to raise their next round of funding to help them expand to other cities in Asia.

Source: Startup brings one-hour wine delivery to Asian cities

Prada Hit by Weak Sales in China, Hong Kong

Source: WSJ

Once the major driver of sales growth, China and Hong Kong now pose the biggest drag on profits at Prada SpA, causing the company’s share price to drop by almost 50 percent over the last year.

Prada’s net profit fell by 25 percent in the first half due to slumping sales in China and Hong Kong. Local media in China also reported that Prada was discounting at its stores, a practice that is typically avoided by high-end luxury brands to avoid tarnishing its brand image.

According to CFO, Donatello Galli, the company expects to cut expenses and slow store openings. At the same time however, the company is working on a new line of handbags which it hopes to attract growth and higher margins.

Source: Prada Hit by Weak Sales in China, Hong Kong – WSJ

Metro joins Alibaba in Chinese e-commerce partnership

Source: International Supermarket News
Source: International Supermarket News

Metro AG, Germany’s largest retailer, has formed an alliance with Alibaba to develop its ecommerce business and help more European consumer brands expand in the Chinese market. This comes as Metro recently completed its USD328 million acquisition of Classic Fine Foods Group, a Singapore-based distributor of gourmet food products.

Source: Metro joins Alibaba in Chinese e-commerce partnership, Consumer – THE BUSINESS TIMES

Alibaba, JD.com Target Rural China for E-Commerce Growth

Source: WSJ

In the face of increasing shareholder pressure, China’s ecommerce companies such as Alibaba and JD.com have started to invest to pursue growth in rural areas. This comes at a time when growth in urban areas have slowed to 17% (compared to 41% growth in rural areas).

Alibaba is investing 10 billion yuan to set up 1,000 county-level distribution centers over the next 3 to 5 years, which will be operated by third-party service providers. On the other hand, JD.com intends to run its own network of warehouses while outsourcing deliveries to third-party logistics providers.

According to analysts, despite the high growth rate in rural areas, deliveries to rural areas make up only 10 percent of parcels generated from Alibaba’s marketplaces.

Source: Alibaba, JD.com Target Rural China for E-Commerce Growth – WSJ

China’s Alibaba thinks outside the box, and inside the minibus

Source: SCMP

E-commerce giant Alibaba is rolling out a new initiative to promote its Taobao marketplace this weekend by inviting the public to try on stylish wardrobes in minibuses provided by Uber that serve as “mobile dressing rooms”.

The minibuses can be summoned via Uber’s app and will operate in Guangzhou, Chengdu and Hangzhou this weekend. The objective is to see how customers interact through this new experience, before rolling out the program to other cities in the future.

Source: China’s Alibaba thinks outside the box, and inside the minibus, as Uber tie-up gives online shoppers ‘mobile dressing rooms’ | South China Morning Post