Ant Financial, which operates Chinese internet giant Alibaba’s Alipay mobile payment app, just made two maneuvers to gain ground in its war against Tencent for dominance of the Chinese mobile payments market: one on the domestic front, and one on the international front.
First, the company announced on Wednesday that it would introduce a new local commerce feature, called “Life Account,” to its native Chinese users. This feature is embedded within the Alipay app, itself, and provides its users the opportunity to browse nearby merchants, receive discount coupons, make appointments, and make payments.
Life Account will also work as a mass data analysis tool, as merchants will be able to use it to locate customers and track their consumption preferences.
Essentially, Life Account can be seen as Ant Financials’ attempt to maintain its waning dominance over Tencent’s WeChat Pay (also called Tenpay), which has been growing at breakneck speeds, and is expected to overtake Alipay’s market share before the year is up.
Most companies and merchants in China have already adopted WeChat Public Accounts, which is putting pressure on Ant Financial to step up its game. Both companies exhibited fantastic growth, including in areas like mobile terminals (ie, terminals where mobile payments are accepted).
In this area, Alipay grew at an impressive rate of 118.6%, only to be eclipsed by WeChat’s astounding 326.9% growth rate during the same period.
Ant hopes that Alipay’s real-name registration requirement will be taken as an advantage over its rival, in that the added security it provides will decrease the chances of fraud and redundancy for its users. As yet, it is unclear whether this will be enough to distinguish the service from that of its competitor.
On the international front, Ant Financial launched its joint venture with Zapper, South Africa’s dominant mobile payment platform, to allow Chinese nationals in the country to use Alipay in about 10,000 Zapper-affiliated local shops.
This particular venture represents Ant Financial’s attempt to reach Chinese tourists on the African continent, which are growing in number. The South African Department of tourism reports that 110,000 Chinese nationals visited South Africa in 2016, in 38% greater numbers than the year before.
This is far from the first instance in which Ant Financial has dug its heels into another country’s mobile payments market. The company has a long history of investing in and making partnerships with its foreign counterparts in a wide array of countries, including India, South Korea, Japan, and even the United States and Russia.
Tencent has adopted a similar strategy, and it recently announced plans to establish an office in the U.K, as well as in another European country, and has made partnership deals with a number of retailers throughout the occident. Now, WeChat Pay is available in 13 foreign countries.
In a similar fashion to its aggressive actions aimed at weakening Tencent’s strong hold over the domestic market, Ant Financial’s foreign ventures are presumably being carried out with the intent of beating its competitor in an ongoing race to capture the emerging global mobile payments market.
Read more at: Bezinga, China Daily, and China Tech Insights.