![]() "The payment services with JD.com, Meituan and other Chinese internet companies usually can only be found within each platform, respectively," he said. But at half its size, I'm not sure," Yang said. Douyin, for example, has an e-commerce business pegged largely to its livestreams and more than half a billion users. ![]() "Tiny platforms shouldn't even try – they have no chance. Yang also cautioned that success will depend on the critical mass of the platform and the desirability of what's for sale. I don't want to enter my bank account information for 20 different payment platforms, and neither will most people." "Chinese customers have gotten used to that. "The reason WeChat Pay and Alipay became ubiquitous is that they're accepted everywhere," Yang said. Internet companies are happy to make extra money, but I'd put payment services in the context of a broader effort by the big platforms to build all-inclusive ecosystems for their registered users," Yang said. "Customer attention is the most precious commodity in retail. Yang Luming, a research analyst at Stansberry China, suggests that other internet platforms should not sever their relationship with WeChat Pay and Alipay until they're sure they've got enough users. There are also user data privacy issues and risks related to financial products, especially consumer or small and medium-sized enterprises credit products, he said. Bao said the internet firms might face profitability issues if the payment service does not reach a certain scale. However, a coin has two sides, and so does the mobile payment business. Smaller payment channels and companies are also encouraged to boost the market competition," Bao said, adding that if companies can get enough people to use their in-house mobile services, they can obtain a positive profit margin. "The general acceptance of mobile payment service in China is very high, and it is not very hard to set up payment service given the existence of centralized processing center. Such a move would be beneficial for a startup, he said. Just like how casinos have no clocks, no windows, and sometimes no phone signal, platforms want to block any outside thoughts from their users' attention."įor Martin Bao, in ICBC International's research department, creating in-house services gives companies greater control over providing a high-quality user experience on their platforms.īao said creating a closed loop of transaction within their own ecosystems allows companies to retain more customers, improve user engagement and gain valuable customer consumption information for more strategic user engagement within their ecosystem. "They're increasingly protective of their users, and maturing platforms with hundreds of millions of active users see a proprietary payment system as another way to keep users captive and monetize them. "Big platforms view an in-house payment system as an ecosystem play," Early explained. "If you can get in on a fast-growing nearly $30 trillion market, why not?" "Douyin built its own payment system to assist its e-commerce business and disconnected all other e-commerce functions inside Douyin app," Early said. James Early, CEO of investment research firm Stansberry China, told CGTN that there is an open door for upstarts in the sector, given the industry growth and size. Some analysts believe it signifies the numerous opportunities for startup enterprises in the market. But competition may just be getting even stiffer.ĭouyin is just one of the latest companies to enter the mobile payment sector. Other internet companies, including e-commerce platform JD.com,, and online service platform Meituan exist in the remaining 6 percent. Currently, Tencent's Tenpay, which includes WeChat pay, and Alibaba's Alipay control the largest share of the pie, with almost 94 percent of the Chinese mobile payment market, according to consumer data provider Statista. Alipay, Taobao and Baidu followed suit in the red pocket event in 2016, 20, respectively.ĭouyin launched its own payment service on January 19, joining an already crowded market. In 2015, WeChat sponsored the gala by developing the "shake and get red pocket" function. ![]() The sponsorship is highly coveted by digital payment providers as a way to boost their user base since the gala is watched by almost 1.4 billion people. ![]() And the move is expected to boost Douyin's presence as a digital payment service provider as people would have to register on the app to participate. On January 26, Douyin, the Chinese version of TikTok, announced it will sponsor the digital "red pocket" segment during the 2021 Spring Festival Gala, where viewers can win money on the app while watching the event. Many Chinese internet firms are keen to develop their own digital payment business as more people turn to a more efficient payment method in the internet era.
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