Apple Inc. (NASDAQ:AAPL) is rumored to be in talks with Alibaba Group Holding Ltd (NYSE:BABA) in regards to rolling out Apple Pay faster in China. Last month, the company’s chief executive officer, Tim Cook, admitted he was talking with the China e-tailer.
Apple’s possible partnership with Alibaba
An arrangement like this would be important in two ways. Alibaba is China’s key player in the online shopping business. It has a market share of about 80%, which would make it a great partnership for Apple. This is especially true if customers are allowed to keep their existing accounts with Apple Pay.
The second reason is that it offers a safe passage for those in the regulatory minefield Apple would have to navigate in the market. Previously, Apple has faced issues with China’s market, including an iPhone 6 delay caused by regulatory issues. If the Cupertino tech giant can work with a Chinese company, it may fair better in the government’s eyes. Cook has his eye set on China. Recently during a visit, Cook said he believes China will become Apple’s largest source of revenues.
Benefits for Alibaba
Such a partnership would also be beneficial to Alibaba. The company is top dog in online retail, but it has yet to establish something just as solid within traditional brick-and-mortar stores. It relies on a soundwave payment system and QR code system that isn’t widely accepted by many retailers. A partnership with Apple could really open things up for the company.
Neither Apple nor Alibaba confirmed the talks, however, the latter’s CEO, Jack Ma, spoke to CNBC on Tuesday and mentioned the possibility of teaming up with Apple. He also spoke about transparency. He added, “As a company we have to be very transparent. We are in a business very related to finance, and I want this company to last long, and I want this company to be audited by everyone.”