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Alipay, the widely used mobile payment app operated by Ant Financial Services, plans to become digitally entrenched in the businesses of 40 million service providers across China, in a move to compete with rival platforms WeChat and Meituan Dianping.
The three-year plan involves opening up the Alipay platform as an online gateway for these service providers in industries ranging from consumer retail, food and beverage, and transport to hotels and accommodation, and medical services, in a move to increase efficiency and serve more consumers by 2030, according to a statement from Ant Financial on Tuesday.
It would also entail Alipay to help these 40 million vendors internally adopt the platform’s various technologies, such as payment, antifraud system, smart marketing, fund management, and customer insight, acquisition and engagement.
“The service sector in China is still in the nascent stages of digital transformation, and that means it has huge untapped potential,” said Ant Financial chief executive Simon Hu on Tuesday at the Alipay Partner Conference in Hangzhou, capital of eastern coastal Zhejiang province. Ant Financial is an affiliate of e-commerce giant Alibaba Group Holding.
Ant Financial’s latest initiative with Alipay, which currently has more than 1 million service providers on its platform, shows how the country’s major internet companies continue to compete aggressively in building “sticky” ecosystems, consisting of various platforms that can host multiple services to attract new users and keep their existing audience.
Launched in 2004, Alipay currently serves more than 900 million users in China and provides in-store mobile payment services in more than 50 markets around the world.
Expanding Alipay’s ecosystem of industry partners has gained more urgency for Ant Financial amid the country’s economic slowdown, which has been exacerbated by the trade war with the US and the coronavirus crisis.
In line with that effort, Alipay has encouraged developers to create so-called mini programs – lightweight apps that run instantly on the main app’s interface – which can be adopted by partners to access Alibaba’s whole ecosystem, including retail platform Tmall as well as navigation and location-based service provider AutoNavi, to reach more consumers.
Alipay said its artificial intelligence-enabled incentive programme will encourage service providers to consistently improve their customer experience and enhance their distribution efficiency. Their users will be able to access personalised recommendations from newly added service sections in Alipay.
The ISVs, meanwhile, will help companies incorporate Alipay’s technologies which come with financial grade safety, reliability and performance.
Those moves would allow Alipay, with more than 900 million users in China, to rival what Tencent Holdings’ super app, WeChat, has pioneered with mini programs. Tencent’s highly versatile social messaging-payments -gaming-and-e-commerce platform, which has more than 1 billion users, currently runs more than 2 million mini programs. In early January, Tencent said WeChat users spent 800 billion yuan (US$115 billion) on the platform’s various mini-programs in 2019, up160 per cent increase from the previous year.
Independent e-commerce analyst Li Chengdong, however, described Alipay as a platform that remains focused on payments and data from such transactions, while the on-demand local services market in China is dominated by Meituan.