Alipay expansion gathers speed with move into Southeast Asia
Chinese online payments giant Alipay is set to expand its operations in Southeast Asia through the merger of parent Ant Financial Services and helloPay, a move that could also advance Alibaba Group’s efforts to build the international coverage of its annual Singles’ Day online shopping promotion.
Ant Financial, an affiliate of e-commerce powerhouse Alibaba, announced that merger on Wednesday, roughly a year after Alibaba took control of helloPay parent Lazada Group with a US$1 billion investment.
All of the operations of helloPay, which was the payments platform of online retail services provider Lazada since November 2014, have been rebranded as Alipay in Singapore, Malaysia, Indonesia, Thailand and the Philippines.
“This merger is another step in Alipay’s resolve to become a truly global brand … and take on the likes of Visa, PayPal or Apple Pay around the world,” Paul Haswell, a partner at international law firm Pinsent Masons, told the South China Morning Post on Thursday.
“Alipay has made no secret of its ambitions for expansion, and we can expect to see more deals like this.”
The success of Alipay, which has attracted more than 450 million users in mainland China since the service was launched in 2004, is widely attributed to its tight collaboration with Alibaba’s core online shopping platforms, Taobao Marketplace, Tmall.com and Juhuasuan.com. Alibaba is the owner of the Post.
During Alibaba’s online shopping promotion on November 11, it was estimated that 120.7 billion yuan (US$17.5 billion) in so-called gross merchandise volume was settled through Alipay.
The expansion of Alipay in Southeast Asia has the potential of helping Alibaba transform its annual Singles’ Day promotion into a fully fledged international event, as the payments service covers Lazada’s operations, according to IDC China managing director Kitty Fok.
“Alipay has already proven its capability to handle a huge amount of transactions within a day in China,” said Fok, referring to its record Singles’ Day volume last year. “So it has the capacity to extend its service into more overseas markets.”
In a report on Thursday, research firm eMarketer said Ant Financial’s experience in getting “unbanked consumers in China to migrate to digital payments systems is likely to translate well to markets in Southeast Asia, with large populations and little traditional banking exposure”.
The features and services of the rebranded helloPay, which has no mobile app like Alipay, will remain unchanged in the meantime, according to Ant Financial.
“It is very likely that some version of an Alipay mobile app will eventually launch in these [helloPay] markets,” eMarketer Asia-Pacific analyst Rahul Chadha said. “One sign that Ant Financial is taking … Lazada’s existing digital payments services seriously is that it plans to relocate the helloPay team to its Singapore offices.”