GlobalData Plc

European merchants will love Alipay

Alipay has announced it will enter the European market in summer 2016. What guarantees its success in Europe is its capabilities beyond payments.

The ever-increasing number of outbound Chinese travelers reached 120 million in 2015, with their spending exceeding $215bn for the year. This has alerted Alipay to the overseas opportunity. After making its name in Asia over the past couple of years, Alipay has now set its sights on entering the European market this summer.

With UnionPay already having a strong presence in Europe, logic suggests merchants will not be interested in another payment platform from China. However, Alipay can offer additional advantages to merchants.

Firstly it has reach: with over 450 million active users, Alipay is the most widely used payment tool in China, and those who are traveling overseas are more than likely to be active users of Alipay. Secondly, Alipay apps actively connect users with merchants, based on their location, by sending users recommendations for restaurants, shops, and tourist spots as well as discount vouchers for the suggested venues. Thirdly, users can write a review of the merchant at these tourist locations.

Alipay will also share data with accepting merchants, such as where Chinese travelers frequent, what they tend to buy, and other information that will help merchants in Europe better understand their Chinese visitors.

There may be some hurdles when Alipay first enters the European market, but once the data on Chinese tourist spending behavior starts to build up merchants will find Alipay a mutually beneficial partner.

By Arnie Cho, Senior Consumer Payments Analyst

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