Maverick China Research - Maverick China Research

A few months ago we interviewed 20 Chinese online merchants and thought I'd share some of my findings with you here.

The 20 companies I interviewed were chosen at random from a list I compiled a few weeks ago. Although the 20 interviews do not give the data analyzed a solid statistical reliability, we have, however, found that the answers we were given are highly indicative of China's payment industry as a whole.

The participating online merchants in this survey included the sellers of clothing and accessories, electronic tickets and game cards, online education services, software sellers, online bookstores, and others.

Accepted Payment Methods

Out of the 17 online merchants who answered this question 100% accept payment through a third-party payment provider (such as an Alipay stored-value account), 71% accept credit or debit cards (mostly debit cards), and most importantly almost half of all merchants interviewd still use cash on delivery; only 35% accept direct wire transfers.

We have recently interviewed 20 Chinese online merchants and thought I'd share some of my findings with you here.

The 20 companies I interviewed were chosen at random from a list I compiled a few weeks ago. Although the 20 interviews do not give the data analyzed a solid statistical reliability, we have, however, found that the results we obtained were highly indicative of China's payment market and decided to post a sample of them here.

The participating online merchants in this survey included the sellers of clothing and accessories, electronic tickets and game cards, online education services, software sellers, online bookstores, and others.

Accepted Payment Methods

Out of the 17 online merchants who answered this question 100% accept payment through a third-party payment provider (such as an Alipay stored-value account), 71% accept credit or debit cards (mostly debit cards), and most importantly almost half of all merchants interviewd still use cash on delivery; only 35% accept direct wire transfers.

We have written previously on the importance of third-party payment providers in China and the low use of credit cards in the following posts:

• Cashing in on Cash-based e-Commerce
• Yeepay’s Tang Bin Talks About the Future of e-Payment in China
• Alipay’s Multi-Channel Payment Options Offer a Stop-Gap Solution for Credit Cardless Online Payments
• Multi-Channel Payments and China UnionPay

Third-party Payment Provider Recognition

We also decided to check how many of the online merchants we interviewed have heard of the third-party payment providers which we identified as China's leading providers in our reports. Here is what we found out:

Notice the very low recognition of China's two leading mobile payment providers UMPay and Smartpay. Another interesting finding is the low recognition for Paypal, the world's leading third-party payment provider.

Third-party Payment Provider Sales Activity

We also checked how many of the merchants we interviewed were contacted by a sales representative of China's leading third-party payment providers. Alipay and 99Bill appear to have the most active sales teams, followed by Tenpay and PayEase.

Partnershipa with Third-party Payment Providers

18 of the 20 merchants have agreed to disclose the names of the third-party payment providers they currently work with. Of these 18 merchants, 83% currently work with Alipay, followed by 50% working with 99Bill, and 44% of merchants working with PayEase. Please note that several online merchants are using more than one payment provider.

Payment Provider Overall Reputation

We have also asked the merchants we interviewed to rank China's "Top 3" payment providers in terms of their overall reputation in the market. According to the interviewed online merchants, Alipay currently enjoys the highest reputation amongst China's payment providers followed by PayEase, 99Bill and TenPay, YeePay, and PayPal. All other payment providers received no votes.

Payment Provider Quality

We also asked merchants to rank China's "Top 3" providers in terms of the quality of their service and got the following results: Alipay again at first place followed by 99Bill, PayEase, TenPay, PayPall, and YeePay. All other payment providers received no votes.