Paypal eyes China's cross-border e-commerce B2B2C market｜WCT: "Cross-border payment giant Paypal will introduce a cross-border e-commerce resolution for China's business to business to consumer (B2B2C) clients in mid-September, showing its determination to attract China's consumer-end users, the China Industry News reports.
The cross-border e-commerce market has seen explosive growth in recent years but most international giants after entering the mainland China market typically face strong opposition from domestic rivals with strong government backing and fail to stay the course. Paypal is hardly an exception, observing current market conditions, the report said.
In the first quarter, China's third-party mobile payment market reached a trading scale of 2.83 trillion yuan (US$444 billion), up 5.18% from a quarter earlier, with Alipay and TenPay dominating the market with a 90% market share, while the remaining 260-plus other third-party platforms fighting over the remaining 10%, according to Analysys International statistics. Alipay alone accounted for about 80%, said Zhang Anyuan, editor of Iyiou.com.
As domestic giants continue to dominate the third-party payment market, it won't be easy for Paypal to make headway, experts said. The nation's payment market will continue to be a battleground between Alibaba and Tencent, they said.
Mainland China consumers have just become accustomed to online payments being handled by Alipay and TenPay and may not even be willing to consider Paypal an option, Zhang said.
After Paypal split from eBay and became listed independently on the Nasdaq on July 20, it has increased the chances of Paypal cooperating with Alibaba or its leading competitor Jingdong Mall (JD.com).
In July, Alibaba founder Jack Ma invested US$600 million in India's version of Alipay, Paytm, with many seeing this as a means for Alibaba to combat Paypal overseas, making cooperation even more unlikely.
Third-party payment services need a special license granted by China's central bank and this may prove the greatest obstacle if Paypal intends to enter China. Paypal submitted its application as far back as 2011 but it has yet to be approved.
Since entering the Chinese market is generally pretty difficult, Paypal has zeroed in on the cross-border e-commerce market, hoping to use the short-cut curve to achieve a breakthrough.
The cross-border e-commerce market has seen fast expansion. In 2014, the country's e-commerce market reached 13.4 trillion yuan (US$2.1 trillion), up 31.4% from a year earlier. Paypal has focused on the huge market, especially as it has the advantage of using the US dollar for payments, while Alipay relies on the renminbi, which is restricted as it is not a fully international currency.
Paypal currently operates in 203 countries or regions in the world, with 2014 transactions reaching US$235 billion. It also claims more than 160 million active users among independent digital-payment service providers."
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