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According to a recent article in Digitimes , Alipay expansion to markets outside China is not going according to plan: Alipay, the largest platform to provide third-party electronic payment service in China, began its operation in the Taiwan market around the end of November 2007 with a goal of attracting 100 online store operators to use its service by the end of 2007, but the number of users was quite far below the target as of the end of 2007
and the reasons being: Alipay's less than expected attractiveness to operators of online stores in Taiwan is because potential customers in China are generally not aware of merchandise available for online sale in Taiwan... The Chinese government has not yet allowed Chinese tourists to directly visit Taiwan and some websites in Taiwan are blocked from access in China...
In our September 2007 report, Alipay - Alibaba's Payment Arm , we reported on Alipay's overseas plans. In August 2007, Alipay along with the Bank of China and China Construction Bank launched a new international service that allows Chinese consumers with no access to foreign currency accounts or credit cards to buy from online retailers abroad. Alipay's new international service enables transactions between Chinese consumers and overseas merchants supporting 12 foreign currencies. Online shoppers surfing the Hong Kong store StrawberryNet, for example, will now see an additional payment option through Alipay. Alibaba Group forecasted then that the service will reach monthly transaction volumes of RMB 800 million (~USD 100 million) by the end of 2007. As pointed out by Digitimes, Chinese Consumers are generally not aware of goods available for sale in Taiwan. I would like to add that the majority of Alipay's business is still derived from the services it offers (for free) to Taobao. The majority of Alipay users only use Alipay to purchase products from Taobao's online market place and the number of users purchasing products through channels other than Taobao remains low, even in China itself. It will, therefore, be no easy task to expand these services into foreign markets such as Taiwan and Hong Kong. |
