Battle for travel-related spending will be fierce, analysts say
Ant Financial, an arm of Alibaba Group Holding, announced a cooperation deal Monday with car-hailing app Uber China, which allows consumers to pay for Uber services outside of the Chinese mainland using Ant Financial's third-party payment tool Alipay.
Those services will be available in Hong Kong, Macao and Taiwan before the weeklong Spring Festival holidays, which start on February 8 this year, and they will be introduced to more overseas markets in the following year, the two companies said in a press release sent to the Global Times Monday.
Previously, Chinese outbound travelers needed a credit card to pay for Uber services overseas, and those transactions were usually settled in dollars. Now, outbound travelers can pay for Uber services in yuan, according to the press release.
The arrangement will help the two companies better serve the growing number of outbound Chinese travelers, experts said. Data released over the weekend by the China National Tourism Administration showed that outbound travelers in China reached 120 million in 2015, up 12 percent from 2014.
"But I believe Alipay isn't just targeting outbound travelers. It is also targeting broader acceptance among overseas users," Liu Dingding, a senior analyst at Beijing-based Internet consultancy Sootoo, told the Global Times Monday.
Liu said Alipay will definitely attract a group of overseas users if it offers subsidies or gives discounts, just as it did in China.
Alipay has stepped up efforts to expand overseas. So far, the payment tool has been accepted in more than 50,000 stores overseas, including hotels, shopping malls and convenience stores. A total of 24 countries, including the favored destinations of Chinese tourists like South Korea and France, offer tax refund services via Alipay, according to the press release.
Some foreign travel websites, such as Airbnb, as well as some shopping websites, also accept Alipay.
Zhang Yi, CEO of market research firm iiMedia Research, said that with Alibaba's market share in China's large cities stabilizing, overseas and rural markets are the main direction for Alibaba to drive its sprawling business.
"The outbound efforts of Alipay can in turn benefit the overseas expansion of the company's e-commerce," Zhang told the Global Times Monday, adding that the growing number of Chinese outbound travelers can also help promote Alibaba's brands overseas.
But Liu noted that Alipay will face a difficult path, as its domestic rival - Tencent Holdings' WeChat payment - has also started overseas expansion.
WeChat payments can now be made in countries like Japan and South Korea. Also, Alipay will face competition from international rivals such as PayPal and Apple's Apple Pay.
"They are all strong firms like Alibaba, so competition will be tough," said Liu, adding that the sprawling e-commerce business of Alibaba can be one of its advantages.
