The long-lasting impact from Covid-19 has forced U.S. retail companies to accelerate their adoption of mobile payment into their everyday business practices for touchless options that help consumers feel safe. By contrast, China is the global leader in mobile pay.
The country is increasingly cashless, as mobile payment becomes ingrained in consumer lifestyles and social media platforms. Let’s look at China's best practices from physical stores to online e-commerce shopping to help American companies prepare for mobile payments.
Mobile payment is all the rage in the post-pandemic era and is everywhere in China. Mobile payment is now embedded into popular social media platforms, like WeChat’s WeChat Pay and Alibaba’s Alipay. Global e-commerce leaders are developing more payment features for seamless end-to-end service. For one, the application scenarios for mobile payments are getting diverse. Mobile payment extends across Chinese consumers’ lifestyles, influencing how they pay at supermarkets, convenience stores and shopping malls.
According to Data.iimedia.cn, the top three scenarios in which respondents most often use mobile payment platforms are food and beverage consumption (69.5% of the time), small brick-and-mortar stores (69%) and online e-commerce shopping (65.3%). Together, Alipay and WeChat Pay account for more than 90% of China's mobile payment market.
The two platforms have become the user's primary choice due to their high market penetration and top-of-mind brands, which attract heavy online traffic. Driven by third-party platforms, consumers have a wide range of mobile payment options for everyday use. On top of that, mobile pay convenience, efficiency and high penetration rate have made digital options more attractive and accessible.
After the COVID-19 pandemic began, the Ministry of Commerce of China issued an initiative on February 6, 2020, to encourage people to use mobile payment and online payment to avoid the risk of infection. This government action further boosted mobile payment transactions in China.
According to China Internet Network Information Center's report released in September 2020, the country's number of mobile payment users reached 802 million, up 36.64 million from March 2020, accounting for 86.0% of mobile internet users. In the first half of 2020, China's mobile payment activity reached nearly $30 trillion, up 18.61% year over year, ranking first in the world.
As COVID-19 encourages digital traffic, domestic merchants increase their investments in contactless payment options to modernize the brick-and-mortar experience.
Mobile payment is just the starting point of digitalization for traditional retail stores. International retail giant Walmart has had a longstanding and deep presence in China, having opened its first store in Shenzhen in 1996. Walmart has also heavily invested in its e-commerce capabilities. Backed by Chinese retailer JD.com's logistics network and the Dada-JD Daojia delivery service, Walmart has built out a comprehensive WeChat mini-program that flexes its omnichannel capabilities on the world’s leading social commerce platform. Today Walmart operates over 400 units across different cities in China, and its WeChat mini-program was available at all Walmart shops in the region last year.
