Alibaba Group Holding Ltd (NYSE:BABA) revealed Monday that more and more users on its Alipay payment platform are processing payments through mobile devices. The latest Alipay Report shows that mobile commerce market is booming in China. About 600 million smartphone users in China are growing accustomed to using their devices as payment tools.
Alibaba executives have a strong grip on Alipay
The New York-listed e-commerce giant told The Wall Street Journal that 54% of the total payments processed on Alipay during January-October period came from mobile devices. By comparison, only 22% payments were processed through mobile in the same period last year. Alipay handles about 80 million transactions every day. It has more than 300 million registered users.
Mobile commerce represents a huge opportunity for Alibaba for the next several years. The Jack Ma-led company launched Alipay in 2011 to process payments on its Taobao platform. In 2011, the company spun off Alipay into a separate entity, though Alibaba still owns a minority stake in Alipay’s parent company Ant Financial. Alibaba executives effectively control Alipay.
Rural users more likely to use mobile for transactions
New data showed that mobile transactions were particularly strong in rural areas where not everybody owns a desktop computer. In Tibet, for instance, 62% of Alipay payments came through mobile devices. Mobile payments were lower in affluent cities such as Shanghai (24%), Beijing (29%) and Guangzhou (27%). According to research firm Analysys International, e-commerce transactions through mobile devices almost tripled from last year to 201 billion yuan during the third-quarter this year.
Alibaba’s Taobao and Tmall have 84% share in Chinese e-commerce, followed by JD.com with just 8%. Alibaba is also in talks with Apple Inc. (NASDAQ:AAPL) for a potential partnership in payment transactions. Alibaba vice-chairman Joseph Tsai said that Alipay could provide back-end services for Apple Pay. That means the Chinese iPhone users will be able to pay for good with Apple Pay using funds from their Alipay accounts.
Alibaba shares fell 1.26% to $103.75 in pre-market trading Tuesday.