Adyen: How the payments industry can ensure its future prosperity this Chinese New Year

By Myles Dawson, UK country manager at global payments platform Adyen.

Chinese New Year is an important milestone for a large population across the world. It also serves as a reminder to the payments industry to not underestimate the spending power of the Chinese shopper.

Chinese consumers are truly global shoppers, leading the world on cross-border purchases. By 2022, leading research company Forrester predicts that cross-border e-commerce could increase by 20%, reaching $630 billion, with China leading the boom. Other national holidays in China, such as Golden Week in October, mark a time where millions of Chinese residents travel abroad to make the most of the global retail opportunities available. In 2017 alone, Chinese consumers shopping for products overseas spent an estimated average of $473.26 each, representing 4.2% of the total retail e-commerce market.

Businesses around the world should ensure they are preparing themselves to capitalise on this important audience, even if they don’t have a huge global operation. Analysts estimate that UK retailers stand to make upwards of $337 million from Chinese consumers in the UK, with 55% of China’s online shoppers spending on average £104 a month on British products. A recent report by international management consulting firm McKinsey, found that Chinese consumers are responsible for up to half of all luxury brand sales worldwide.

With many consumers taking the holiday season as an opportunity for a spending spree, businesses accommodating a diverse range of payment options will benefit most. Even if a business doesn’t have a presence in China, it shouldn’t overlook the large market opportunity that the region offers. Delivering a seamless and familiar payments experience is a crucial first step for those businesses wanting to cash in.

Research shows 79% of China’s shoppers make purchases via their smartphone, compared to 28% of UK shoppers. By offering local payment methods in-store and online, this increases the opportunity of closing a sale. China-specific payment methods WeChat Pay, AliPay and China Union Pay need special attention as the three most popular methods used by Chinese consumers. Alibaba’s Alipay is the world’s largest third-party mobile and online payment platform, used by more than 520 million people and supporting 27 currencies. Similarly, WeChat Pay is one of the most popular mobile payment apps in China. WeChat has 1.3 billion users, 400 million of whom use the app for either paying friends through peer-to-peer payments or purchasing a product.

Following November’s record-breaking Singles Day sales and Chinese New Year, it’s more important than ever for the payments industry to enable Chinese consumers to make purchases with their method of choice. Providing Chinese customers travelling abroad with the payment experience they are used to at home will provide a significant benefit for businesses and is a sure-fire way to secure repeat business and boost your customer experience.

Europe and America are popular destinations for Chinese tourists, so it’s vital that payments-savvy businesses cater to the needs of this incredibly important and large customer base as they travel abroad. This way, the payments industry can ensure its future prosperity in this New Year of the Dog.

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