Alibaba Group’s Alipay payment service is being introduced at 10 key overseas airports in an effort to further expand the company’s reach beyond China’s borders. The ambition is to make payments and access to other mobile services more seamless for Chinese travelers at their overseas destinations.
As competition in China’s mobile payments industry is heating up, Alipay is making another move to make itself ubiquitous for Chinese customers as it expands the reach of its services to 10 overseas airports. Alipay has long been the market leader in China, but is facing increased competition from Tencent, the internet giant behind WeChat and its competing WeChat Pay feature. Similar to Alipay, WeChat Pay is trying to expand beyond China’s borders to strengthen its competitive positioning in the Chinese market. Notably, both Apple and Samsung have also entered China’s mobile payments market and are perhaps more competitive in Chinese overseas payments than they are in domestic payments.
Market share of Chinese mobile payments in 2015.
Alipay’s new “Airport of the Future” program is rolling out at 10 overseas airports in 2016, nine of which rolled out their new services just in time for the start of China’s Golden Week holiday in the beginning of October. The first nine airports included in the program are located in Germany, Hong Kong, Japan, South Korea, Macau, New Zealand, Taiwan, and Thailand. Japan is the first country with two major airports taking part, with Osaka’s Kansai International Airport and Tokyo’s Narita International Airport both adopting Alipay. Singapore’s Changi Airport is scheduled to roll Alipay services out before the end of the year. Importantly, these airports represent a significant share of Chinese overseas arrivals, and cover five of the nine hottest destinations for this year’s Golden Week.
However, many important airports and hubs that play vital roles in Chinese international travel have yet to be covered by Alipay’s expansion efforts. For instance, Alipay cannot be used in any airport in the United States, and its European presence is limited to Germany’s second busiest airport, Munich Airport. The United Arab Emirates, which plays an increasingly important role as a transport hub for Chinese travelers to Africa and Europe, is also absent. Nevertheless, Alipay has done a good job in covering many of the most important destinations for Chinese tourists throughout Asia.
Peng Yijie, vice president of the international business unit of Ant Financial Services Group, Alibaba Group’s subsidiary that is responsible for Alipay, said in a press conference that the 10 airports included in the Airport of the Future program are only a first step towards the ambition of covering the 30 most visited overseas airports among Chinese tourists.
In addition to simplifying purchases for Chinese customers throughout the airports, the program also includes additional location-based features catered for Chinese travelers. For instance, Alipay will help travelers find information about local shopping and dining options, simplify hotel reservations, as well as provide travelers with flight reminders. Alipay claims that it will expand upon these features as the program progresses, with mobile check-in, indoor navigation, and WiFi connectivity listed as some of the features in the pipeline.
Alipay’s Airport of the Future program is one of many efforts among Chinese companies to follow their most profitable customers and expand their operations in overseas destinations. Even though ease of payment with familiar mobile solutions when abroad is good news for Chinese travelers, overseas companies may find it hard to keep up with China’s fast-developing payment services industry. Accepting Chinese UnionPay cards used to be the only prerequisite to be on the forefront of the burgeoning Chinese outbound tourism industry, but mobile payments are changing the playing field entirely—and can mark the difference between accommodating and satisfying Chinese customers.