Over half of payments via Alipay are being made on a mobile device, one of the key areas of growth Alibaba is focusing on while facing stiff competition from the likes of Tencent and Baidu.
Alibaba disclosed new data today showing that its payment affiliate is processing an increasing amount of transactions through mobile device. For the year until October, 54 out of every 100 payments with Alipay were made using a handset or tablet. This figure has more than doubled since last year, when only 22 out of every 100 payments were mobile payments.
The data also showed that mobile payments are especially prevalent in rural areas where people are less likely to own a desktop computer. The highest proportion of mobile payments came from Tibet, where more than 62 per cent of Alipay payments were made on mobile. While major cities such as Beijing or Shanghai saw the biggest spending using the service, smaller cities such as Yiwu, a small city in Zhejiang province, saw the highest average onlie spend per user of 65,160 yuan ($10,595) this year, the Wall Street Journal reported.
Alibaba is currently facing competition in the Internet industry from fellow Chinese firms Tencent – an online game and social-networking company – and Baidu – an Internet search provider. But the company is holding its own thanks to its payments affiliate Alipay, which was separated from the e-commerce giant in 2011 but is still effectively controlled by executives and board members shared by Alibaba and Alipay’s parent company Ant Financial. This part of Jack Ma’s empire has expanded into financial services with a service called Yu’e Bao, which allows Alipay users to invest in a money-market fund.
Alibaba benefits from Alipay’s growth through a profit sharing agreement. The payments affiliate processes payments on Alibaba’s Taobao and Tmall online marketplaces, and also handles many other types of online and offline payments.
The Wall Street Journal noted that “China’s online shopping transactions through mobile devices more than tripled from a year earlier to 201.32 billion yuan” according to research from Analysys International.
“Taobao and Tmall accounted for 84 per cent of those transactions, while JD.com , the e-commerce partner of rival Tencent, accounted for 8 per cent,” the report added.
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