Definitely, It has been one of the e-commerce events of the year. And here we have learned a lot about payments at all levels: , , … even about e-payments in the Advanced East, which, precisely, has been the subject of the last presentation of the event, offered by Carlos Garcia of of which we have revealed little to you… until now.
doWhat you need to know to break into the Chinese market and how the payment systems of this country work? Do not miss what the TLG Commerce Frontend Development Manager tells us. If the information in itself is interesting, coming from a member of a great partner to start selling in China or Asia, such as TLG Commerce, it is even more so.
The curious image of Asia at the level of payment systems
Asia is very large and has different countries and different realities. It is very important to know very well each of the markets that are being attacked, as well as their reality. Keep in mind that the payment system is the last step of a sale and it is the most important, since it is the one in which the user needs more confidence. Here we find surprising cases that here we rarely think could happen, such as:
- Octopus: It was born as a card to pay on the subway and on public transport in Hong Kong and little by little it has evolved into its own payment system for the offline and online worlds. Currently, you can pay with Octopus everywhere: restaurants, taxis…
- Family Mart: It has a strong presence in Hong Kong, Thailand…
- 7-Eleven: It may sound American, but it became a Japanese subsidiary in 2005.
All these cases have taken advantage of the large volume of customers they have and their loyalty programs to end up creating very widespread payment systems used in those marketswhich allow you to pay for everything.
Why China is the market to exploit at the moment
There are a few quick facts to know about China:
- Population: 1,412 million people, compared to Spain where there are only 46 million;
- Mobile users: 1,119 million;
- Persistent internet users: more than 900 million;
- E-commerce users: 551.5 million.
In 2018, China has made online sales in the fashion sector exceed offline sales.
And why has it evolved like this? At the beginning of the .com, in the explosion of Google and others, exponential growth was already taking place in the United States, while China had not yet reached it. The jump is from 2012.
How has the development of the Chinese market been?
In China the growth has been from 0 to 100: they have gone directly to mobile. We are talking about a country in which the big cities are very crowded, people live in very small spaces, are constantly on the move and have a different reality. The percentage of mobile use in the online environment is between 98% and 99%. Hence its importance.
Another important point is the marketplaces. These are very strong and have a great deal of market penetration, something that has also conditioned in part which payment systems are preferred by the user. Marketplaces can be divided in a general way, with their corresponding forms of payment, into two:
- Size: belongs to the group and only allows its own payment system, which is .
- : It is not exactly what we know as a marketplace, but a place where companies can have their stores and sell their products. This app has an incredible development in China and only allows you to use its payment system: Pay.
How is the reality of payments in China?
In China, people no longer carry their wallets and credit cards. He goes down the street, wants to buy something, take a taxi or do something that involves an economic transaction and what he does is use his mobile. It’s simple. You just have to scan the QR code that corresponds to the merchant, through which we confirm that we want to make a payment. The merchant reports the amount to pay, we choose it and once he, who is also with his mobile, receives confirmation that he has received the payment, we can carry the items.
China is an exclusively mobile market in which people only use mobile. Currently, the payment systems division is mainly focused on Alipay and WeChat Pay, which is experiencing spectacular growth in China.
Why are these payment systems used throughout China?
In addition to the influence that marketplaces have, the marketing they can do as brands and so on, there is a very important reason why these are the main payment systems in all of China: the chinese government is doing a lot push for this to be so and he decides what can be done and what not. But why is the government interested in this being the case? black money. Once you get everyone in China to work with these payment systems, you automatically control the entire tax system.
In China there is a lot of street vending and a lot of markets that until now had no government control. It is one of the reasons why online payment systems are being applied to offline. This is the current trend, although everyone is looking at the WeChat model.
The role of social media in China
In China, the ones they like are their own, like WeChat, which is also a social network, because these are the ones they can control. There are networks that are prohibited in China, such as Twitter, Facebook… Thus, there are markets in Asia that are easier to enter than in China. At the level of numbers they are not as spectacular, but they do not have a government action as restrictive as that of China. We could even go from talking about the Great Wall to great firewallas connections from China to China are often censored, as are connections from China to outside the country.
What’s so extraordinary about WeChat
Initially, WeChat was born as a WhatsApp-type application, in which you could only chat with your friends, and little by little it has been incorporating functionalities until it has become an all-in-one. Some say that it is like an operating system within another operating system. Everything is done through the application: take a taxi, book a hotel, a trip… It has reservation systems, marketplaces to buy everything and even a kind of Tinder, among many other features.
What companies that are entering the Chinese market have to do is develop within WeChat. This app has what is called mini-programs, which are exclusive WeChat applications that make the entire ecosystem that is being created grow. For example: if you go to a fast food restaurant, there are no receptionists, registers or panels to choose your order. Everything works from WeChat. You place your order from WeChat and they deliver it to you when you arrive.
Is a Western WeChat planned?
Facebook and others are already trying to corner the market of banking entities. We see it in movements such as the purchase of WhatsApp, Instagram and others by Facebook. There is a suspicion that someone is trying to bring the WeChat model that has worked very well in China to China..
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