Alipay opens platform to become one-stop gateway for 40 million service providers across China

Tan KW

Publish date: Wed, 11 Mar 2020, 04:44 PM

Alipay, the widely used mobile payment app operated by Ant Financial Services, is pursuing an ambitious plan to become digitally entrenched in the businesses of 40 million service providers across China, in a move to gain an edge over rival platforms WeChat and Meituan Dianping in the world’s second largest economy.

The three-year plan involves opening up the Alipay platform as an online gateway for these enterprises - in industries ranging from consumer retail, food and beverage, and transport to hotels and accommodation, and medical services - to increase efficiency and serve more consumers by 2030, according to a statement from Ant Financial on Tuesday.

It would also entail Alipay working with 50,000 independent software vendors (ISVs) to help these 40 million service providers internally adopt the platform’s various technologies, such as payment, antifraud system, smart marketing, fund management, and customer insight, acquisition and engagement.

“The service sector in China is still in the nascent stages of digital transformation, and that means it has huge untapped potential,” said Ant Financial chief executive Simon Hu on Tuesday at the Alipay Partner Conference in Hangzhou, capital of eastern coastal Zhejiang province. Ant Financial is an affiliate of e-commerce giant Alibaba Group Holding, which owns the South China Morning Post.

Ant Financial’s latest initiative with Alipay, which currently has more than one million service providers on its platform, shows how the country’s major internet companies continue to compete aggressively in building “sticky” ecosystems, consisting of various platforms that can host multiple services to attract new users and keep their existing audience.

Expanding Alipay’s ecosystem of industry partners has gained more urgency for Ant Financial amid the country’s economic slowdown, which has been exacerbated by the trade war with the US and the coronavirus crisis.

“Amid the ongoing coronavirus outbreak, we have also seen how digital technology can be used to help service providers become more agile and respond effectively to the fast-changing market environment,” Hu said.

“Building a one-stop digital lifestyle platform not only creates immense value for our users - it will also play an essential role in accelerating the digital transformation of the service industry and unlocking more growth opportunities.”

In line with that effort, Alipay has encouraged developers to create mini programs - lightweight apps that run instantly on the main app's interface - which can be adopted by partners to access Alibaba’s vast ecosystem, including retail platform Tmall as well as navigation and location-based service provider AutoNavi, to reach more consumers. Ant Financial launched its mini program effort in 2018.

Beijing-based grocery startup Meicai, which connects farmers with consumers and restaurants, recently launched a mini program to make its delivery services available to Alipay users amid the Covid-19 outbreak. In one week, Meicai attracted more than 800,000 new users and orders poured in from across 80 cities in China, according to Alipay.

Alipay said its artificial intelligence-enabled incentive programme will encourage service providers to consistently improve customer experience and enhance their distribution. Their users will be able to access personalised recommendations from newly added service sections in Alipay.

The ISVs, meanwhile, will help companies incorporate Alipay’s technologies which come with financial grade safety, reliability and performance.

Those moves would allow Alipay, with more than 900 million users in China, to rival what Tencent Holdings’ super app, WeChat, has pioneered with mini programs. Tencent’s highly versatile social messaging-payments -gaming-and-e-commerce platform, which has more than 1 billion users, currently runs more than two million mini programs.

In early January, Tencent said WeChat users spent 800bil yuan on the platform’s various mini programs in 2019, up 160% from the previous year.

Independent e-commerce analyst Li Chengdong, however, described Alipay as a platform that remains focused on payments and collecting data from such transactions, while Meituan continues to dominate China’s on-demand local services market.

The Beijing-based food delivery giant recently teamed up with the Beijing local government to help bookstores, which are struggling to survive amid the coronavirus epidemic, to help get books into the hands of readers.

- SCMP

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