Apple Pay’s China Launch: Who Will Win Over Chinese Luxury Consumers’ E-Wallets?
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With an optimistic plan to take on entrenched Chinese mobile payment rivals, Apple Pay made its move into mainland China on Thursday this week in hopes of making the country its biggest market.
While some experts doubt the prospects of Apple’s high-tech payment system to compete with local giants including Alipay and WeChat, luxury retail is taking notice of the method. On the date of Apple Pay’s launch, Lane Crawford announced that all of its mainland China locations will offer Apple Pay, making it one of the first retail locations in the country to offer the service. “Offering Apple Pay as a payment option to our customers is another important step towards an even stronger connected commerce strategy, constantly evolving and leveraging on the digital and mobile world which is vitally important in Asia,” said Lane Crawford President Andrew Keith in a press release.
The launch allows China’s only credit card company UnionPay, which has teamed up with Apple Pay, to take on Alipay and Tencent’s TenPay as they compete to win over Chinese consumers’ e-wallets.
Limited to the iPhone, some experts are saying Apple Pay faces an uphill battle in China as local mobile options have already become incredibly popular. In addition to the fact that Apple will have to take on local giants, experts have found that many Chinese netizens are wary of Apple Pay for a variety of additional reasons. Online comments suggests that many are suspicious of giving their bank card number to a U.S. company and show a preference to earn interest from Alipay. Meanwhile, Apple Pay doesn’t have built in “shopping app” features and discounts found on Alipay and WeChat Wallet, including WeChat’s direct link to dining app Dianping.
“In addition to the fact that Apple will have to take on local giants, experts have found that many Chinese netizens are wary of Apple Pay for a variety of additional reasons.”
But as the iPhone remains a luxury status symbol for Chinese consumers, Apple Pay could possibly find a niche among affluent urbanites, depending on whether or not more retailers like Lane Crawford choose to make it available.
The development of this competitive landscape is of equal importance to luxury retailers not only in China, but also abroad, which are scrambling to keep up with payment methods most popular with Chinese tourists. Many international luxury retailers now offer UnionPay, but a growing number of them are allowing Chinese customers topay with Alipay or with WeChat, giving them an advantage over those who haven’t moved past UnionPay. Regardless of whether or not Apple Pay manages to catch on with China’s jet-setting iPhone owners, retailers across the world will need to up their payment technology to keep up with their Chinese VIPs’ preferences.
Questions & Answers
Q.What is one key reason experts believe Apple Pay may struggle to gain traction in China?
What is one key reason experts believe Apple Pay may struggle to gain traction in China?
Experts note that many Chinese netizens are wary of providing their bank card details to a US company. Also, some prefer to earn interest from services like Alipay, which Apple Pay does not offer.
Q.How might Apple Pay differentiate itself in the highly competitive Chinese mobile payment market?
How might Apple Pay differentiate itself in the highly competitive Chinese mobile payment market?
The iPhone is considered a luxury status symbol in China, so Apple Pay could potentially find a niche among affluent urban consumers if more high-end retailers adopt it, similar to Lane Crawford.
Q.Beyond the mainland, why is Apple Pay’s launch in China relevant to international luxury retailers?
Beyond the mainland, why is Apple Pay’s launch in China relevant to international luxury retailers?
International luxury retailers are closely watching the payment market to keep up with Chinese tourists' preferences. They need to adapt their payment technology to cater to these valuable customers worldwide.
Q.What competitive advantages do Alipay and WeChat Wallet hold over Apple Pay in China?
What competitive advantages do Alipay and WeChat Wallet hold over Apple Pay in China?
Alipay and WeChat Wallet offer built-in shopping app features and discounts, unlike Apple Pay. WeChat also provides a direct link to the dining app Dianping, adding to its appeal.
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