Pacific Epoch reports that Tencent plans to offer an offline recharging service for its online
payment tool Tenpay. Tenpay plans to send employees to
collect customer money in person in exchange for a RMB 15 service fee and that customers can use the service to recharge Tenpay
accounts with RMB 10 to RMB 1,000.
With its recent launch of Youa.com and BaiFuBao, Baidu has made an emphatic entrance into China's quickly growing e-commerce market, a territory dominated by incumbents, the Alibaba Group and (to a lesser extent) the Tencent Group.
The Alibaba Group includes:
Alibaba.com, a Nasdaq-listed B2B e-commerce website
Taobao.com, China's leading C2C and B2C e-commerce website, and
Baidu is following a similar model of binding an e-commerce website
with its own online payments provider, which is a telling sign for the
future of online commerce and online payments in China. Independent
third-party payment companies in China, many of which are struggling
with user signups and transaction volumes, are in trouble.
As Apple is making big news by becoming the world's 3rd largest mobile handset vendor, Chinese OEMs are making a push to promote their own brands in what is still an "iPhoneless China". On display at the ongoing P/T Expo in Beijing were HTC, Techfaith, Qigi, Aigo (which is well-known in China for its mp3 players), and many others handset brands that were once primarly OEMs - which are in the business of building handsets for larger established handset brands. Many of these new handset models feature a touch screen interface, accelerometer for automatic screen rotation, and large colorful screens - three qualities that have made the iPhone successful with consumers. The iPhone has pushed the boundaries for handset vendors worldwide, and from what I saw at the P/T Expo, competition is certainly pushing for greater innovation from the market.
In other noteworthy observations, Sharp made a strong impression with its newly released SH 8010C and SH9010C handsets, both equipped with automatic screen rotation and the latter with a beautiful Aquos display screen. Motorola, on the other hand, was either not in attendance or lost among the smaller booths.
The recent acquisition of Bill Me Later by Paypal highlights the large descrepency between the online payment industry in the US and in China. In the US, discussion are about market share, growth, and added value to consumers. Increased competition (coupled with market growth) has led to a market for M&As, which over the last 6 years has included the acquisition of no less than two market leaders - Paypal to Ebay in 2002 and the recent Bill Me Later sale to Paypal.
In China, however, discussions are about business models, funding, and network buildout. One of the major holdbacks for online payment companies in China is actually the absence of an established credit card infrastructure. Paypal, while also offering a stored-value account payment solution, operates a payment platform that is closely reliant on established Visa and MasterCard payment networks in the US. Paypal offers merchants (especially smaller and medium sized merchants) the ability to accept credit card payments without have agreements directly with banks and credit card companies. Bill Me Later, while offering consumers value as an alternative to online payments via credit cards at merchant sites, actually still relies on Visa's and MasterCard's payment network in the backend for processing. Payment companies in China do not have the luxury of established credit card networks to develop online payments and that has immensely slowed industry development in China.
As credit card networks and third-party payment networks in China develop simultaneously in China, we are seeing new types of payment models developing.
In our market reports, we take an in-depth look into the various types of online payment and mobile payment models being developed in China as well as the companies striving to become China's equivalent to Paypal.
According to MIIT's latest statistics broadband subscribers this month increased by 1.521 million to reach 79.348 million. China Telecom's broadband subscribers increased by 0.7 million to reach 41.5 million and China Netcom's broadband subscribers increased by 0.3 million to reach 24.3 million according data release by China Telecom and China Netcom, respectively.
