While the e-commerce market in the EU is growing at a healthy rate of 13% a year, many other markets are far outperforming that – which is great news for merchants across the globe. According to recent reports, the average global e-commerce growth rate is 38%, with China leading the way, expanding at an impressive 64% per year, followed by Malaysia at 47%, Indonesia at 45%, Saudi Arabia at 43% and Russia at 42% - making up the the top 5 fastest growing e-commerce regions worldwide.
Such high growth rates show profound evidence for online shopping outside of the core regions you might expect. This makes it all the more important for merchants to ensure their online presence is accessible to a wider, global audience.
With China leading the way in e-commerce success, we’re placing the spotlight on the Chinese consumer to show you how you can tap into this market successfully. Your first priority to attract lucrative Chinese consumers is to adapt to their payment preferences. China leads the way for mobile payments, mobile optimised stores and app development. In China, 57% of payments are made via e-wallets and only 16% of the population have a credit card.
You need to ensure you are catering for the needs of Chinese consumers to maximise payment success on your website.
The local payment culture in China
Payments from smartphones are standard fare in China - and e-wallets not only allow users to buy online, but also to manage and transfer funds, manage investments and even split the bill. E-wallets are the most popular type of online payment method in China, with 49% of market share for e-commerce transactions, while credit and debit cards come second, with a 25% market share, followed by cash (9%), various other minor payment methods (9%), and online bank transfers (8%)
The top 3 payment methods that the Chinese shopper uses are Alipay, UnionPay and WeChat Pay- these payment options businesses must keep in mind if they want to seize the opportunity of the Chinese shopper, so let’s take a look in more detail:
Let’s take a look at WeChat Pay, which started out as a messaging platform but today is packed full of useful resources, such as instant payments and mobile top-up. And it doesn’t stop there, WeChat also enables you to hail a taxi, order food or movie tickets and even obtain personal-shopper style advice. It’s no wonder the platform has soared in recent years. WeChat has 963 million monthly active users and recently took a step towards worldwide acceptance by allowing non-Chinese credit cards to be used for mobile payments. This is the first time WeChat Pay users do not need a Chinese bank account or credit card - an important step for possible worldwide acceptance in the future.
Alipay is China's leading mobile payment method providing a simple and and secure way for millions of individuals and businesses to make and receive payments online. Alipay has over 520 million users worldwide. In Q4 2016, Alipay accounted for 54.1% of mobile payment transactions in China. Alipay provides domestic and cross-border payment services through partnerships with more than 200 financial institutions including leading national and regional banks across China, as well as Visa and MasterCard. Similar to WeChat Pay, Alipay is so much more than a payment method, it is a “lifestyle super app” enabling users to book cinema tickets, order a takeaway and transfer money on the go; revolutionising and simplifying the shopping and checkout experience.
China Union Pay
China Union Pay is the state run credit and debit card system with the largest reach in China and overseas. Every Chinese consumer with a bank account is automatically linked to Union Pay simply because they are a customer of one of 165 participating banks. The sheer volume of users make China Union Pay very attractive for global businesses. That’s why from an international perspective, more than 10 million online merchants based outside the Chinese mainland support UnionPay Online Payment.
Retail ecommerce sales in China are expected to reach $1.13 trillion this year,while total cross-border ecommerce sales in China are expected to reach $115 billion by the end of 2018, with the average spend per cross-border digital buyer at $882. What’s more, buying certain goods from overseas e-commerce websites has also become more attractive for Chinese consumers since the Chinese government reduced import taxes on cross-border purchases last year.
The opportunity for e-commerce businesses is immense for every size of business. Sectors that are performing particularly well for cross-border online purchases in China are cosmetics, baby formula and fashion, food / beverage and healthAnd you don’t have to be a retail giant to succeed, in fact, we interviewed our customer, Emerald Green Baby recently about their journey in selling into China, read their story here.
Alternative payments don’t need to be complex. We can help you to negotiate the complexity of doing business in China with an international payments solution that can help you adapt to local markets seamlessly and with confidence. To help you to expand cross-border, Global Payments offers over 140 alternative payment methods to complement a multilingual checkout and worldwide coverage on the ground in 54 countries.