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Alipay Reports Enormous Growth in Mobile Ecommerce in China

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The availability of online-payment services has played a major role in making goods and services widely available throughout China, including rural areas, according to a report from Alipay, China’s largest online payment service provider by volume.

According to Alipay’s Annual Spending Report, which coincides with the company’s tenth anniversary, online shopping has also made products to available to consumers in remote locations throughout China at the same prices as urban shoppers – and this change has been facilitated by mobile commerce.

Mobile transactions made up 54 percent of all transactions this year, up from 22 percent last year, and 9 percent in 2012. This increase in mobile transactions is especially apparent in rural areas. For instance, in the remote region of Tibet, more than 62 percent of Alipay payments were made through mobile phones, up from 32.7 percent last year.

Across China, 190 million people use the Alipay Wallet mobile app, which facilitates payments, but also allows users to book hospital appointments, pay for taxi rides and make investments as the Alipay platform has grown and added new functionality.

Last year, for instance, Alipay debuted Yu’e Bao (literally translated “leftover treasure”) which is a financial platform that allows users to invest excess money in their Alipay account for typically higher returns than banks and while still being able to withdraw funds quickly. However, investors have seen smaller returns in recent months.

This mobile ecommerce penetration in rural areas, however, is significant given that 177 million among the total of roughly 620 million Internet users in China are rural, according to China Internet Network Information Center estimates.

China was among the top five national markets for ecommerce expansion over the next several years according to a Forrester report, offering a huge opportunity for the companies able to abide by its strict regulations around commerce that have favored local companies.

Among the companies to gain the most from China’s expansion in online services is Alipay’s parent company, Alibaba Group Holding Ltd. The Alibaba Group has been continuing to aggressively build its data center footprint in support of its ecommerce and cloud computing business, and is also considering a U.S. stock market listing.

It seems clear that, at least when it comes to payments, China’s ecommerce trends are benefiting Alipay and The Alibaba Group.

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About the Author

David Hamilton is a technology journalist and Contributing Editor of the WHIR. Based in Toronto, David has covered the hosting industry internationally for the WHIR with particular attention to innovative hosting solutions and the issues facing the industry. He has written for the National Post and other news outlets, and is a graduate of Queen’s University and the Humber College School of Media Studies.

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