Chinese fintech giant Ant Group is aggressively expanding abroad, with its eyes now on Saudi Arabia.
Singapore-based Ant International, which extends the group’s innovative fintech solutions to global markets, has signed a Memorandum of Understanding (MoU) with the Ministry of Investment of Saudi Arabia (MISA) to facilitate business growth in the kingdom.
The partnership includes establishing an entity in Saudi Arabia that would assist Ant International in obtaining licenses and certifications to broaden its service offerings.
Ant International’s strategy will grant merchants greater access to digital payment solutions, including Alipay+, Antom merchant payment services, WorldFirst digital payment and financial services for cross-border trade, and Anext Bank, a digital wholesale bank regulated by the Monetary Authority of Singapore.
“We’re delighted to build upon our progress in the Middle East to support merchants’ access to our world-class payment solutions and inclusive financial services, providing Saudi businesses with various tools to grow and benefit from international travel and trade,” said Douglas Feagin, President of Ant International.
The move comes as Saudi Arabia doubles down on attracting Chinese tourists, with plans to welcome 5 million visitors by 2030, Gloria Guevara, chief special advisor at the Saudi Ministry of Tourism, told Chinese news agency Xinhua.
To achieve this goal, Saudi Arabia has allowed Chinese visitors to apply for visas on arrival, increased daily flights between the two countries, launched a Mandarin version of its travel website, and collaborated with leading travel partners on marketing campaigns. In 2023, Saudi Arabia received 140,000 Chinese tourists.
The increasing integration of digital payment solutions is set to bolster Saudi Arabia’s tourism industry.
“With the addition of Alipay+, visitors to Saudi will have a more seamless and integrated payment experience by using their familiar home payment methods while exploring new places,” said Choon Yang Quek, Chief Technology Officer at Saudi Tourism Authority (STA), when Alipay+ signed an MoU with the STA to explore the possibilities of introducing its services to the country last year.
It’s not just Chinese tourists who stand to benefit. Alipay+ connects over 88 million merchants in 57 countries and regions to 1.5 billion consumer accounts on over 25 e-wallets and banking apps. This means that global visitors will be able to access their preferred e-wallets in Saudi Arabia as well.
The simplification of cross-border payments presents an enormous opportunity for local businesses across the Middle East, including luxury. Although Chinese tourists still prefer to shop for luxury products domestically — or in Japan, given the weak yen — that doesn’t mean they won’t splurge on luxury retail and hospitality experiences.
According to a recent Hurun Research survey, Chinese high-net-worth individuals’ spending on high-end services like hotels rose 20 percent in 2023 to 830 billion RMB ($118 billion) compared to the year prior. Significant spending was also directed towards health services and wellness travel.
And Saudi Arabia is poised to capture this spending with its accelerated rollout of luxury hotels. In January 2024, The St. Regis Red Sea Resort, the first private island resort in the Red Sea, officially opened with a starting rate of about $1,866 (7,000 SAR) per night.
In April, Marriott International, Inc. announced that it had signed an agreement with Neom to establish a Ritz-Carlton Reserve in the mountain destination of Trojena, offering a complete escape into a private world of luxury.
With Saudi Arabia serving as a portal to the Middle East, it’s only a matter of time before the rest of the region joins in to attract high-spending Chinese tourists.