Walmart and Tencent Alliance in China may cross anti-monopoly line

Let go Alipay and Welcome WeChat Pay

Walmart has stopped accepting Alipay at its 90 supermarket stores and started taking on WeChat pay at all stores located in the Western region of China including Yunnan, Guizhou, Sichuan, and Chongqing, according to China Daily’s report.

Walmart China has confirmed they reached a deep partnership with WeChat and there will be more exclusive benefits and discounts coming up soon. The two will also collaborate in big data analytics and precision marketing, the multinational retailer said it has ended the partnership with Alipay the two formed in 2015 and that it was a business decision.

Behind the scene

Walmart is JD.com’s third-largest shareholder with just over 12% of shares, and the two formed a strategic partnership back in 2016. WeChat Pay’s operator Tencent is JD.com’s largest shareholder with over 21% share. Therefore it is not hard to figure out that Walmart has become a part of Tencent’s blueprint to enter new retail.

Turf War – Gain upper hand by controlling traffic entry point

The Alibaba-Tencent turf war isn’t new and neither is Tencent’s exclusive right to its competitive strategy. Last September, Starbucks announced that it would start accepting Alipay rather than WeChat pay, 10 months after it had reached a deal with WeChat Pay.

WeChat Apply believes that in the new retail era, the situation where Double Ma devouring market has already formed, related players in the field need to choose which side to go with. The core competition is about who is grabbing the online and offline traffic entry points.

Not only in supermarket chains, we would anticipate more “choose a side” to occur to those high-frequency payment scenarios where these two giants are wrestling such as services like share bikes, shared car and food takeaway.

Detriment of Consumer Benefit?

Some specialist stated the move by Walmart may draw consumer watch dog ‘s investigation on whether the move was an act of monopoly nature.

Some consumers are complaining that not able to use Alipay has created inconvenience when shopping at Walmart stores in question. They are used to Alipay, and their WeChat wallets don’t have enough credits.

WeChat Apply team appreciates the Walmart regional’s strategic move was a strong win for Tencent and WeChat while we also took a dialectical view that the Walmart China’s move may cause some kind of anti-unfair trading and anti-monopoly law in China.

From a micro perspective, removing Alipay from their cashier could be detrimental to consumer’s freedom of payment choice. From a macro perspective, it can be viewed as an action to undermine the fair trade. It is allegedly to take advantage of its market position by limiting a certain condition of transactions, it could cause a distortion of the free market. However, it is subject to the law reinforcement and judge’s call to observe, investigate and decide.

About WeChat apply

WeChat apply is an award winning China WeChat digital marketing agency based in Sydney.Working across all aspects of the marketing solutions like WeChat promotion, WeChat Official Account Registration, WeChat KOL, WeChat Mini Program Ad. and so on, we will ensure you have a solid marketing strategy together with perfectly delivered campaigns. Wechat apply  will transform your China online marketing to increase your lead generation, brand awareness and market engagement.

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China’s Four Great New Inventions in Modern Times

A number of China’s technological innovations have been making their moves in the world. Among them, four stand out with a reputation of China’s “four great new inventions” in modern times, which have made the daily life of the public more convenient. They are not actually inventions in technical term, however thanks to China’s huge scalability, the following 4 phenomenon have been pushed to a whole new level leading the world.

Dockless Shared Bicycles

There are over 30 bike-sharing companies in China that operate around 10 million bicycles for shared use to individuals in dozens of Chinese cities.

Although the service of shared bikes originated from Western countries, China surprised the world with a business model of station-less shared bikes that spearheads the sharing economy.

Compared with traditional shared bikes, dockless bikes allow users to simply pick up or park a bike anywhere on the street, instead of at designated docking points.

By combining GPS, smartphone apps, mobile payment and Internet of Things technology, China’s system of dockless shared bikes provides the public with a convenient and affordable transport alternative.

To unlock a bike, you need to scan a QR (Quick Response) code on a shared bike through a smartphone app. To finish riding, you manually lock the bike and pay for your ride though mobile payment services that are connected with the bike app, such as AliPay and the WeChat wallet.

China’s two leading bike-sharing operators, Mobike and Ofo, have been gearing up for global expansion.

Mobike entered Singapore in March and Manchester, Britain, in June. Its distinctive orange bikes can also be spotted on the streets of Florence and Milan, Italy. This September, Mobike is set to land on the soil of London. Ofo, similarly, has begun operating in the United States, Britain, Singapore and Kazakhstan.

In the financial market, the two rivalries have also gone neck and neck. In June, Mobike raised $600 million in a Series E financing round led by China’s Internet titan Tencent, the largest in the global bike sharing industry to date. Now, the company’s total funding has reached nearly $1 billion. In February, Ofo also raised $450 million, which valued the company at $1 billion.

High-Speed Train

Boasting low cost and quick delivery, China has built the world’s longest high-speed rail (HSR) network. Branded as a “name card” for China, HSR runs at speeds of 250-350 kilometers per hour (km/h).

By the end of 2016, China had a 124,000-km railway network, which had the world’s largest HSR network of more than 22,000 km. It had operated 2,595 high-speed trains by 2016, which took up 60 percent of the world’s total high-speed trains.

HSR service debuted in China in 2008. Since then, the country has witnessed an average annual growth of over 30 percent in passenger trips, according to statistics from the China Railway Corporation. By 2016, there had been more than 5 billion passenger trips on China’s bullet trains in eight years.

Currently, China is working on next-generation bullet trains with a maximum speed of 400 km/h. By 2020, one fifth of the country’s 150,000-km railway network will have been HSR, linking more than 80 percent of major cites across the country, according to data from the National Development and Reform Commission.

China’s HSR has also gone global. In 2014, China completed the construction of its first overseas high-speed rail in Turkey. In June 2015, China and Russia inked deals for 770 km of track connecting Moscow and Kazan.

In October 2015, China and Indonesia signed a joint-venture agreement on the construction of a high-speed rail between Jakarta and Bandung. Besides, the China-Thailand railway is currently under construction.

Alipay and WeChat Pay lead China’s move to a cashless society, so customers can scan for purchases. FENG YONGBIN / CHINA DAILY

Alipay, , is China’s leading mobile and online payment service, established in 2004 by China’s e-commerce giant Alibaba Group. During the online transaction process, Alipay acts as a third-party platform, on which buyers pay for their goods by imputing payment passwords or scanning payment code on the Alipay app installed on their mobile devices.

Mobile Payment

Besides, Alipay can also be used for transferring money from one Alipay online account to another account, or from the online account to a bank account by binding a debit card to the online account. It is such convenience that enables China to edge its way towards being a cashless society.

On top of that, users can pay family or personal bills through Alipay, such as water and electricity bills.

Alipay also supports cross-border online and in-store payment, which allows users to make purchases on international websites and apps with Alipay.

Far back in 2013, Alipay exceeded PayPal as the world’s largest mobile payment platform. Thanks to the massive user base and various payment scenarios in China, online and mobile payment has enjoyed absolute advantages in market competition.

In the first quarter of 2017, the market share of Alipay and its major rivalry Tenpay (Wechat pay) reached respectively 54 percent and 40 percent, according to Chinese market research and consulting company iResearch.

E-commerce

With around 731 million Internet users, China has been the world’s largest and fastest-growing e-commerce market. In 2016, online shopping in China saw a growth rate of 26.2 percent, generating 5.16 trillion yuan ($767 billion), according to a report on China’s economic data by the National Bureau of Statistics.

Last year, Chinese people bought more food online with a growth of 28.5 percent. Clothing sales rose by 18.1 percent in the year, while items like mobile devices took up nearly 12 percent.

E-commerce now accounts for 15.5 percent of the total retail sales in the country. Thanks to lower costs and fewer licensing requirements, the bar for individual merchants to open an online shop in China has been set lower than the threshold for opening a physical retail store.

E-commerce has also injected fresh vigor and vitality into the economy of rural China in recent years. In 2016, e-commerce created more than 20 million jobs in rural villages, with over 8.1 million online business owners. Rural buyers also contributed 894 billion yuan ($131 billion) to China’s e-commerce sales last year. Leading operators in China’s e-commerce market include JD.com, and Alibaba’s Tmall and Taobao.

About Wechatapply

Wechatapply is an award winning China WeChat digital marketing agency based in Sydney.Working across all aspects of the marketing solutions like WeChat promotion, WeChat Official Account Registration, WeChat KOL, WeChat Mini Program Ad. and so on, we will ensure you have a solid marketing strategy together with perfectly delivered campaigns. Wechatapply  will transform your China online marketing to increase your lead generation, brand awareness and market engagement.

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In a restaurant in Sydney, the cash register has a paper sign saying Minimum spending $30, and Amex surcharge 3%.

After a nice dessert, waiter sees your pen signing gesture and nods his head. He walks towards the cash register. A couple of minutes later, he comes to your table and a handheld wireless POS. You browse through the bill while pulling out a non-Amex credit card from your wallet and hand it over to the waiter. He swipes your card on the POS. Then you crunch in passcodes on the device.

“Would you like a receipt? “ The waiter asks.

“Yes, please”, you reply with a courtesy smile.

A curly docket is popping out of the device with a printing mechanical sound and a slashing noise.

“Here you go.” Says the waiter. You stuffed the docket in your wallet with a Thank you.

This way of paying restaurant bill simply would not happen in restaurants in Hangzhou. Because the bill paying story above is too slow and time wasting.

Facial recognition to pay for restaurant bills has really come into reality in Hangzhou. In September 2017, Alipay announced the technology went online at KFC’s flagship restaurant in KPRO, a shopping town in Hangzhou. Customers can authenticate their payments by having their faces scanned. The “Smile to Pay” application takes just one to two seconds to recognize and identify a face, which follows the scan with a second verification through a mobile phone. The technology is fully insured, and users of Alipay can disable or enable the feature any time.

Combined with 3D cameras and likeness detection algorithm, ‘Smile to Pay’ can effectively block spoofing attempts using other people’s photos or video recordings

Saving face is a classic Chinese culture element and now Hangzhou siders are just stepping into an era of Spending face.

What do you know about Hangzhou

Westerners are quite likely aware of China Big 4 when talking about Chinese megacities, Beijing Shanghai Guangzhou, Shenzhen,北上广深 respectively. While things are changing fast in China, Hangzhou, 180 km southwest of Shanghai, on China’s eastern seaboard, is rapidly catching up to be a leading and iconic city representing China’s latest tech and economic trends.

It was the most splendid and prosperous city in China since it was the capital city in Song Dynasty 1000 years ago. It has since been a hot tourist destination thanks to its West Lake, a World Heritage Site, green tea, silkworks and a lot more.

Now it is known by the world the hometown of Jack Ma, Alibaba’s Head Quarter base, strong entrepreneurship culture, open-minded and efficient government to private sectors, 9 million well-educated population there, etc.

Hangzhou has become the driving force of China New Economy because of the e-commerce giant Alibaba. It has another new tag – global mobile payment city. Hangzhou people can go wallet-less when they go out.

Alipay enabled subway networks

As the subway line 2 started commissioning near closure of 2017, the Alipay was also rolled out at all 72 subway stations. People can use Alipay to get in and out of the subway. They will never have to buy ticket or card in Hangzhou. All they have to do is scan their mobile phone’s QR to scan in and scan out.

Alipay enabled bus networks

In May 2016, Hangzhou launched the service of scanning Alipay QR while boarding bus. The service has now covered all 5000 strong buses in Hangzhou, again the city is the first among its competitors in the country to implement Alipay on the bus. It is also expected WeChat Pay is soon to apply to the entire public transport network. The technology and the practice have been learned and adopted across China

Birthplace of bike share service in China

As early as 2008, Hangzhou began to build a public bicycle network, which was six years earlier than the nowadays shared bike frenzy. Hangzhou siders give the bike a nickname, the Little Red, which is rented hundreds of millions of times a year. The city’s owned Bike share technology has been licensed to 175 cities in China with good profit return to the city’s taxpayers. Now Chinese city dwellers and visitors are just so familiar with scan the QR at the back of the shared bike and hook it up with WeChat Official Account then connect to unlock, ride, park and go.

Once at a train station at Sydney, I bump into a schoolboy who asking me spare a dollar or two helping him buy a train ticket home? I think the way of his asking is out of date compared with the street beggars at Hangzhou. It is said that street beggars in Hangzhou accept alms by displaying their mobile phone QR codes next to their coin plates.

It was the Hangzhou which helps Alibaba be successful or was the Alibaba who makes Hangzhou successful? Another chicken-egg question.

About Wechatapply

Wechatapply is an award winning China WeChat digital marketing agency based in Sydney.Working across all aspects of the marketing solutions like WeChat promotion, WeChat Official Account Registration, WeChat KOL, WeChat Mini Program Ad. and so on, we will ensure you have a solid marketing strategy together with perfectly delivered campaigns. Wechatapply  will transform your China online marketing to increase your lead generation, brand awareness and market engagement.

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