China’s Alipay on track to top PayPal
China’s leading online payment firm
Alipay is expected to top US payment provider PayPal by transaction
value in two years, becoming the world’s leading e-payment service,
according to Polo Shao, president of Alipay.
“I think by 2011 there is a possibility of
that happening,” he told Reuters in an interview.
Alipay, a unit of the Alibaba Group, says it
handles CNY1 billion ($146.5 million) in transactions daily and
will reach an annual volume of CNY1 trillion in two years to become
the world largest e-payment firm.
The announcement by Shao regarding Alipay’s
prospects comes at a time of significant investment and growth at
the Alibaba Group as it plans to dominate Chinese, Asian and even
global e-commerce and online retailing. On top of Alipay, Alibaba
also operates Taobao, described as China’s largest online retailer
site; and Alibaba.com, a leader in business-to-business (B2B)
e-commerce and the flagship brand of the Alibaba Group.
In July last year, the platform announced that
the total number of its users – as opposed to just ‘active’ users –
reached the 200 million user milestone, overrunning PayPal, which
has 180 million users in total around the world.
In November, Alibaba.com announced that
third-quarter 2009 revenues had risen 32 percent year-on-year,
though quarterly net income declined 20.4
percent due to investments in staff and technology.
All of the group’s subsidiaries continue to
innovative and reach new partners: in the middle of December,
Taobao, for instance, announced plans to launch integrated,
third-generation (3G) handsets for mobile shopping. Taobao will
launch three mobile phones pre-loaded with its applications
sometime in early 2010 in an attempt to bring more users to the
online shops available on its service.
Launched in 2003, Taobao serves nearly 145
million registered users. Transaction volume reached a record CNY81
billion in the first half of 2009 – equal to approximately 1.4
percent of China’s total retail trade in the period. According to a
statement on Taobao’s website, China’s online shopping market grew
90 percent in the third quarter of 2009 year-on-year to CNY65.9
billion.
Last July, Alibaba formed a major strategic
alliance with Bank of China, collaborating on several initiatives
including online payments, international business co-operation,
small business financing and joint marketing (see
BPA6).