In China, technological advances in mobile payment have developed hugely in only five years. Electronic wallets are quick, secure and free to use, and today 450 million people in China are taking advantage. Wallets are an excellent way for brands and labels to find out everything (or nearly everything!) about their clients’ habits and preferences.
Often, it’s the first thing we do when we wake up. We reach for our smartphones, check our messages, tap in a few notes, see what has been happening on our social media feeds. Then we slide our precious companion into our pockets, only to take it out again two minutes later. Mobiles have become essential items from which we can’t be separated. “In China, some people have understood this and seen huge potential in mobile internet’s first tentative steps,” says Stéphane Joly, Executive Vice President of Altavia Asia, “Major groups like Tencent have focused their technological efforts on mobile use, which has exploded in the past few years.” The Chinese now scan QR codes to access apps or sites and to pay for products and services. It’s all done using a mobile phone.
The electronic wallet’s success
Whether they use WeChat Pay (Tencent) or Alipay (Alibaba), more and more Chinese people are taking out their smartphones at the tills. More than 450 million in fact! “It has quickly become a habit, although five years ago it didn’t even exist,” adds Stéphane Joly, “I no longer carry cash, just like 45% of electronic wallet users. When I go to a restaurant, I pay with my phone. It’s the same for taxis, the supermarket and a coffee at the café on the corner. Everyone has QR code readers!”
In China, mobile payment transactions today represent 5.5 trillion dollars. That’s 50 times the size of the American market (10 times more for a comparable population size).
Mobile payment is totally secure, free, efficient and leads to significant time savings for users (scanning and paying only takes a few seconds). And there’s the freedom you gain by not having to deal with cash.
Always a step ahead
Behind the phenomenal success of WeChat, launched in 2011, is Chinese new technology group Tencent. The group is almost unknown in Europe, although they have been experiencing rapid growth over the last few years. Tencent has risen to become one of the 10 highest-listed companies in the world, with 300 billion market capitalisation (in first place is Apple, with 800 billion dollars).
Originally a simple messaging system, WeChat has today become an app which lets you do almost anything; Chinese users spend 30% of their online time on it. However, in 2013 two messengers were being widely used: QQ, with 820 million users, and the young WeChat, which only had 200 million users at that time. Four years later, QQ has not developed and is about to disappear, whereas WeChat, which has integrated mobile payment into its functions, has grown its user base to five times its 2013 size. Messengers without mobile payment have no future in China, and Tencent has quickly become aware of the fact.
And the adventure is far from over. When it comes to electronic wallets, “the Chinese are always thinking about how they can help users become more at ease and confident,” says Stéphane Joly, “Alibaba subsidiary Ant Financial has just acquired the American start-up EyeVerify and its iris recognition technology for mobile apps. Fingerprint secure transactions will soon be replaced by a system which they say is impregnable.” Indeed, China is always one step ahead!
Dominating the world of transactions
Focusing technological efforts on the mobile sector, and, in particular, phone payment, is in fact a highly strategic choice. According to Stéphane Joly: “We know that the crux of customer insight is understanding client transactions, so enabling the electronic wallet to succeed is more than relevant. The Chinese have invested everything in QR code technology, which involves scanning codes with a phone, with a view to dominating these notorious transactions.” Considerable amounts of data are collected and brands know everything about their clients’ behaviour and habits: perfect for launching a carefully targeted ad campaign with results of which you can be sure.