Chinese consumers may as well throw their physical wallets out the window now that companies are stumbling over each other to offer the best mobile payment option on the market, with Swiss watchmakers particularly keen to compete with Apple's evolving smartwatch capabilities.
The latest piece of wearable tech to join the fray comes courtesy of Swatch, who introduced a new timepiece earlier this week, Bellamy, that allows wearers to make payments via UnionPay and Bank of Communications.
At $95, the Swiss brand’s smartwatch clocks in at a much lower price compared to the Apple Watch, with mobile payment function set to go live in January. Swatch has spent the past few years marketing its collection of more affordable timepieces to the growing number of Chinese middle-class consumers. The company’s CEO has maintained that sales have been on a steady upswing in China, despite an overall slowdown in sales for Swiss luxury watchmakers, which is partly attributed to Chinese President Xi Jinping’s anti-graft campaign.
Apple has taken a more fashion-focused approach in marketing its own smartwatch. The tech company, which is viewed by many Chinese consumers as a luxury brand in its own right, unveiled its latest collection of smartwatches last month, featuring bands designed by Hermès, the high-end stalwart that is continuing to do well with Chinese shoppers despite slowing luxury sales.
While Apple has not been able to establish a much-coveted full integration with UnionPay, outside of providing the UnionPay app on its smartphones last year, the Apple Watch does offer Alipay integration, and the U.S. giant is also aiming to introduce its Apple Pay system into China. While there has been speculation that Apple would try to partner with Alibaba to launch Apple Pay in China, this possibility now seems much less likely. The Wall Street Journal has reported that Apple has registered its own payment business in Shanghai's free trade zone, while Alibaba recently announced the release of its own payment-friendly smartwatch last month in cooperation with FiiSmart, a Chinese wearable fitness operator. The gadget costs slightly more than the Bellamy at $110, and enables retailers to supply consumers with a QR code to make a transaction via Alipay, in addition to having push notifications for phone calls and WeChat messages, as well as a heart-rate monitoring system.
But when it comes to third-party mobile payment systems in China, there's also Tencent's WeChat Wallet system, a growing contender in the third-party payment platform race. Those who don't own a smartwatch most certainly have the WeChat Wallet function on their smartphones, which only needs to be connected to the user's personal bank account before they can use it to make transactions with the simple push of a button or the scan of a QR code. While everyone from the street vendor to the coffee shop is moving towards accepting WeChat payments, even stores outside of China are recognizing the need to make their payment systems WeChat friendly. At present, WeChat’s app for Apple Watch does not include the popular mobile payment function, but it will surely only be a matter of time before Tencent yields to consumer demand to roll out this function on smartwatches.
As competition between third-party payment providers for share in the emerging smartwatch sector heats up, only time will tell whether Swatch has gained a few points for Swiss watchmakers in China against Apple's trailblazing new wearable gadget.