While it is the most ubiquitous form of electronic payment in China, Alibaba‘s mobile payment wallet, Alipay, is now ensuring that Chinese consumers use this payment option even while traveling abroad. Recently the company announced that the Alipay app will be launched in Europe to allow Chinese tourists to pay for their purchases while travelling in this region. The app will automatically recognize the location of a Chinese user and provide details about restaurants, tourist attractions and shopping destinations around them in Europe, in addition to the payment option. As foreign tourism is increasingly getting popular in China, Alibaba appears to be tapping into this trend to ensure that its payment application is used for the high spending in foreign locations by Chinese tourists, thus generating additional revenues for the company. See our complete analysis for Alibaba Europe Most Popular Tourist Destination Outside Asia For Chinese Tourists According to an analysis by GfK, in 2015 there were 109 million outbound Chinese tourists with a retail spend of nearly $229 billion. While Asian destinations remain popular with these tourists, Europe was the most popular destination for Chinese tourists travelling outside Asia. The number of air and overnight visits in Europe increased by 97% in the last four years. Because Chinese millennials are more ambitious travelers and willing to spend on luxury and entertainment, these numbers are likely to increase significantly in future. Alibaba is looking to tap into this trend and get a share of this spend on its payment platform. In order to attract merchants in Europe towards Alipay, the company is providing analytics around Chinese consumers using its app to merchants, allowing them to analyse spending patterns, preferences and seasonality of Chinese travelers. This should attract merchants to partner with Alipay and allow Chinese tourists to pay at their stores with this app. Given the popularity of Alipay in China, users should automatically use it while travelling in Europe, wherever the app is accepted thus generating revenues for the company. Association with merchants in Europe will also set the foundation for Alipay’s global expansion. The company is already the biggest investor in India’s mobile wallet and e commerce company Paytm. The global mobile payment market is expected to reach $620 billion in 2016 and cross the $1.000 trillion mark by 2019. Alibaba seems to be well poised to take advantage of this growth. At a recent conference, the company’s management mentioned that it is targeting two billion users for Alipay within in the next five to ten years in China and other countries. This is a significant growth expectation, compared to the current 450 million users on the platform now. While the company has established itself strongly in China, opening up its platform in other countries will be key to achieve this growth, in our view. The expansion into Europe should keep its existing users hooked even when they are travelling abroad and act as an enabler for global expansion in future. View Interactive Institutional Research (Powered by Trefis): Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap More Trefis Research Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.
As foreign tourism becomes more popular, Alibaba's mobile payment wallet 'Alipay' is set to launch its app in Europe to enable Chinese tourists to use the service abroad. Expanding into Europe will broaden Alipay's global reach and increase the amount spent on its payment platform; Chinese tourism to Europe has increased by 97% since 2012. In addition, Alipay is looking to partner with European merchants by providing data on Chinese consumer habits in exchange for its payment method being introduced in stores.