Daniel Slotta
Research expert covering Greater China
Alipay - statistics & facts
When Jack Ma received the 10th rejection of his application to Harvard Business School, little did we know that one of his companies would partake in a transformation of commerce that was comparable to the introduction of paper money in the 7th century Tang dynasty. Together with WeChat, his company Alipay was at the forefront of making digital payments into the mainstream in China and making the country a global leader in the digital payment domain.
Continuous improvement of the user experience and new services were among the leading principles for Alipay’s rise. Its popularity online quickly spread to the offline world, brick and mortar shops and vendors began making use of the app’s reliability and user-friendliness that benefits both parties of the transaction. When users’ funds began accumulating in their accounts, Alipay’s developers noticed that they could offer a money market fund with higher returns than bank deposits. That Yu’EBao service was the breakthrough for Alipay to become a fintech provider. Since then, the service catalog has expanded, Alipay has demerged from Alibaba Group to form Ant Group. With a market valuation of 120 billion U.S. dollars, Ant Group was the second-largest unicorn in China and one of the most anticipated IPOs.
But that is not all. The app also has functionality that enables access to government services and other everyday amenities. Through partnerships of Alipay with healthcare providers and hospitals, users can obtain medical services online and offline. Furthermore, registered users have the option to connect their car license plate to the app and pay speeding tickets and road toll is automatically deducted from the users’ deposits. But functionality goes further, for instance, users in China can check the frequency of their baby’s name through the birth registry. After all, this expansion of services, while not necessarily profitable, incentivizes people to use the app and consequently increases user stickiness.
How did Alipay become so successful?
Alipay originally was only a side product and was never intended to become the fintech giant it is today. When Taobao launched, its biggest issue was a mutual distrust between buyer and seller. To resolve the lack of trust, Alipay offered a third-party escrow service, who would withhold the payment until the goods have arrived in good condition. After growing in the Alibaba ecosystem, Alipay expanded its services to other online retailers, which paved the way for taking on the offline world.Continuous improvement of the user experience and new services were among the leading principles for Alipay’s rise. Its popularity online quickly spread to the offline world, brick and mortar shops and vendors began making use of the app’s reliability and user-friendliness that benefits both parties of the transaction. When users’ funds began accumulating in their accounts, Alipay’s developers noticed that they could offer a money market fund with higher returns than bank deposits. That Yu’EBao service was the breakthrough for Alipay to become a fintech provider. Since then, the service catalog has expanded, Alipay has demerged from Alibaba Group to form Ant Group. With a market valuation of 120 billion U.S. dollars, Ant Group was the second-largest unicorn in China and one of the most anticipated IPOs.
The colorful bouquet of fintech services and more
Alipay is a household name in the Chinese fintech industry. The app offers its users a broad selection of financial services in a one-stop solution. While Alipay is mostly known for being one of China’s leading digital payment providers, domestic users have access to private wealth management, micro-loans, and credit scoring, among others. Thereby, the main selling point is the seamless integration of the different services centered around user-friendliness.But that is not all. The app also has functionality that enables access to government services and other everyday amenities. Through partnerships of Alipay with healthcare providers and hospitals, users can obtain medical services online and offline. Furthermore, registered users have the option to connect their car license plate to the app and pay speeding tickets and road toll is automatically deducted from the users’ deposits. But functionality goes further, for instance, users in China can check the frequency of their baby’s name through the birth registry. After all, this expansion of services, while not necessarily profitable, incentivizes people to use the app and consequently increases user stickiness.
