Alipay Case Study
Alipay is China's leading third-party online payment platform. It was launched in China in 2004 by Alibaba Group which founded by Jack Ma. Alipay refers as a wallet for user’s digital life. It is a mobile or web app providing an easy and secure way for millions of individuals and businesses to make and receive payments on the Internet.
Up until December 2014, Alipay had more than 300 million registered users and around 8 million transactions are made daily. Hence, Alipay is a key catalyst in the growth of the online retail market in China, Gross Merchandise Volume (GMV) leaped from RMB 1 billion in 2003 to RMB 248 billion in 2009.
Alipay provides an escrow payment service that reduces transaction risk for online consumers. They can first …show more content…
With more than 80 million transactions per day, which in turns generating 519 billion of all time, it is important for us to understand why most Chinese consumers choose to use Alipay instead of Paypal.
Most people in other countries opt for Paypal (credit card as payment method) when they are shopping online because of the security it provides whereas another major alternative is Alipay, where consumers can directly link Alipay account to bank account for payment. From the popularity of Alipay, we can see that most Chinese consumers choose to take the latter option. Even though credit card usage is on the rise in China, Chinese people are big savers and they prefer not to buy on credits. This is partly due to a cultural phenomenon which Chinese people tend to only buy something they can afford as comparing to the Western culture which people tend to buy things as long as they like. Therefore, Alipay is well-placed to dominate the Chinese e-commerce market before Western companies such as Paypal to formulate strategies and get into the …show more content…
The license enables Alipay to continue serving Taobao and other customers in China. It is authorized by the Alibaba to Alipay in ensuring that intellectual properties and technology are well-protected. Alipay will pay Alibaba Group the royalty and software technology services fee, which consists of an expense reimbursement and 49.9% share of the consolidated pre-tax income of Alipay and its subsidiaries. Meanwhile, software technology services will be provided to Alipay so as to safeguard its intellectual
Up until December 2014, Alipay had more than 300 million registered users and around 8 million transactions are made daily. Hence, Alipay is a key catalyst in the growth of the online retail market in China, Gross Merchandise Volume (GMV) leaped from RMB 1 billion in 2003 to RMB 248 billion in 2009.
Alipay provides an escrow payment service that reduces transaction risk for online consumers. They can first …show more content…
With more than 80 million transactions per day, which in turns generating 519 billion of all time, it is important for us to understand why most Chinese consumers choose to use Alipay instead of Paypal.
Most people in other countries opt for Paypal (credit card as payment method) when they are shopping online because of the security it provides whereas another major alternative is Alipay, where consumers can directly link Alipay account to bank account for payment. From the popularity of Alipay, we can see that most Chinese consumers choose to take the latter option. Even though credit card usage is on the rise in China, Chinese people are big savers and they prefer not to buy on credits. This is partly due to a cultural phenomenon which Chinese people tend to only buy something they can afford as comparing to the Western culture which people tend to buy things as long as they like. Therefore, Alipay is well-placed to dominate the Chinese e-commerce market before Western companies such as Paypal to formulate strategies and get into the …show more content…
The license enables Alipay to continue serving Taobao and other customers in China. It is authorized by the Alibaba to Alipay in ensuring that intellectual properties and technology are well-protected. Alipay will pay Alibaba Group the royalty and software technology services fee, which consists of an expense reimbursement and 49.9% share of the consolidated pre-tax income of Alipay and its subsidiaries. Meanwhile, software technology services will be provided to Alipay so as to safeguard its intellectual