Right now Chinese consumers can already pay for a wide variety of products and services via m-payment:
Wireless value-added services (WVAS), including SMS, MMS, ringtones, ringback tones, and WAP-based services. (NOTE: In this report we do not discuss the WVAS sector, as our focus is on the vast majority of products and services outside the operator-controlled systems through which WVAS are bought and sold.)
Phone and other utility bills
Ticket reservation and purchase (including lotteries, air flights, movies, etc.)
Mobile banking
Why, then, have none of these services besides WVAS become popular or profitable?
In August 2006, we published a report called "Mobile Payment in China: Bricks and Clicks Going Mobile?". In this report, we analyzed several mobile companies in China, including a company in Beijing called Nation-M. Just recently, we had trouble opening their website and had trouble getting through to their office. We even tried to contact Nation-M's founder via his direct line, but that number has been canceled by the telephone company already.
Does this mean that Nation-M has gone under? Could this be the beginning of a market consolidation phase in China's m-payment industry? We decided to explore further into this situation to see what we could dig up.
As my colleague Boaz has mentioned in a previous post , Alipay's overseas expansion is not going as smoothly as planned. I have take a closer look into Alipay's international business and found the following tidbits:
1. Alipay's international merchants consist mostly of retailers from cosmetics, fashion, personal electronics based in Hong Kong and Taiwan. To a certain degree, this "international market" is largely limited to Greater China, not too much about America and Europe, i.e. a broader sense of international market.
China's decline in fixed-line subscribers accelerated in December with a net loss of over 4 million subs. China Telecom reported a loss of 1.48 million and China Netcom a drop of 2.53 million. This brings the overall fixed-line subscriber loss in 2007 to 7.25 million.
On January 3rd, China daily reported on a newly issued ban on the online sale of lottery tickets:
The online sale of lottery tickets was banned yesterday by a circular jointly issued by the Ministry of Finance, the Ministry of Civil Affairs and the General Administration of Sports.
This is a potential blow to China's third-party payment providers.
