Apple Ready To Compete With Wechat Pay And AliPay In China

apple pay

A worker demonstrates how to use Apple Pay, October 20, 2014 in San Francisco, California.  Justin Sullivan/Getty Images

 

Apple is launching a seduction campaign in China promoting its Apple Pay service through very attractive discounts. the objective is to compete again the main  Payment Methods in China, Wechat Pay and AliPay and to conquer a China market that is still reluctant on Apple products.

 

Between July 18 and 24, consumers using Apple Pay to make payments in designated online and offline merchants in mainland China that display the logo of UnionPay’s quick pass facility will receive discounts of up to 50% and as much as 50 times the usual amounts of reward points for credit cards, according to Apple’s official Chinese website.

 

A total of 28 offline retail stores, supermarkets and restaurants such as 7-Eleven, Watsons, Starbucks and Burger King, and 16 internet merchants including bike-sharing app Mobike, online travel app Ctrip as well as JD.com, will be participating in the campaign, according to Apple.

 

But the promotions offered by Apply Pay are subject to various rules on different merchants. For example, 7-Eleven and Watsons stores have capped the discounted amounts to 10 yuan and 50 yuan, respectively.

 

Pizza Hut, which offers to rebate 80 yuan ($11.81) on a single receipt above 160 yuan via Apple Pay, only allows stores in Beijing, Shanghai, Guangzhou and Shenzhen to participate in the promotion.

 

Apart from retailers, 17 Chinese banks, including the four largest state-owned lenders, will be offering up to 50 times the usual amount of reward points when payments are made by respective credit cards through Apple Pay.

 

The one-week promotion is the largest ever for Apple Pay in China since its debut on February 18, 2016.

 

“I am happy to see that Apple finally has decided to do something to gain market share in China,” said IDC China managing director Kitty Fok.

 

“I am happy to see that Apple finally has decided to do something to gain market share in China,” said IDC China managing director Kitty Fok.

ALIBABA-UNAlibaba executive chairman Jack Ma, attends the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, January 18, 2017. REUTERS/Ruben Sprich

Alibaba executive chairman Jack Ma.  Thomson Reuters

 

According to Beijing-based research agency Analysys, the third-party mobile payment market in China is dominated by Alibaba and Tencent, whose Alipay and WeChat Pay has 53.7% and 39.5% of the market as of the first quarter of 2017, respectively.

 

At a 7-Eleven store in Shenzhen, a salesperson said a majority of consumers make purchases through Alipay and WeChat Pay while payments via Apple Pay are rare.

 

“People are accustomed to Alipay and WeChat Pay in China, which also offer various cash rebates or discounts now and then. But if Apple Pay is having big promotions, I think it will attract more consumers to use it,” the salesperson said.

 

Unlike Alipay and Tencent Pay, which can be installed in all kinds of mobile devices, the future of Apple Pay in mainland China, which is only supported on iPhones and Apple Watches so far, is uncertain.

 

In the first quarter, Apple shipped 9.6 million iPhones in China, down 26.7% from the same period a year earlier. Apple had a 9.2% share of the smartphone market in the first quarter, down from 11% in the fourth quarter of 2016 and 12.7% in the first quarter last year.

 

Alibaba Group is the owner of the South China Morning Post.