How to provide customers from China with a habitual and convenient service
It’s been three years since Chinese payment systems started making their difficult way into the Russian market. Despite the differences and competition between Alipay and WeChat Pay, both payment systems have to adjust their tactics of implementation into the Russian & CIS payment landscape.
However, one obvious conclusion can be made based on the interaction of Yandex.Checkout with both payment systems: strong marketing and active cooperation with local businesses are required to become popular and lucrative on a new market, writes Ilia Sokolov, head of Asian business development at Yandex.Checkout.
Getting familiar with the market
At first glance it can even seem that accepting payments with payment systems Alipay and WeChat Pay can cause more questions than it can provide solutions. How can a company get a potential customer from China familiar with the assortment of products in advance? How can a business tell them about the company and its location? How to make a brand better recognised among the Chinese audience? Despite huge popularity of Alipay and WeChat Pay within China, local companies outside of China mostly use cash and Union Pay bank cards. It is not about local companies not being used to payments with QR codes, lack of demand from tourists on payments via Alipay or WeChat Pay, or conservativeness. The payment system itself does not provide solutions to questions that the local businesses encounter. So, how to attract the desired client from China?
The Russian market for the Alipay and WeChat Pay payment systems is not very big. As it is mostly Chinese citizens that use them to make purchases, the amount of payments is limited to the stream of Chinese citizens coming for tourism and business purposes. Nevertheless, it is not a small number: the stream of tourists from China to the Russian Federation in 2018 amounted to 1.8 million people, and that number is spread (though not completely equally) all across the vast territory of the country. On the other hand, in Russia, Yandex.Checkout works with over 200 merchants that accept payments from Chinese citizens with their preferred method, and it has seen a visible demand on the implementation of Alipay and WeChat Pay payment systems.
A small key to big opportunities
The popularity of the Alipay and WeChat Pay payment systems cannot be explained exclusively by the convenience and low cost of the QR code payment technology. The main advantage provided by these payment systems is a wide range of marketing opportunities that cannot be accessed through traditional payment methods. Supported by its large-scale infrastructure and hundreds of millions of users, Alipay and WeChat Pay can immediately inform them about local and global discounts and new offers from partners. Location-based user notifications about interesting offers nearby is an unbelievably flexible tool. A wide range of settings within the applications enables partners to organise a virtual storefront and make their potential customers familiar with their products in advance.
For example, the audience of the WeChat app and social network, which includes WeChat Pay payment system, already consists of over 1.1 billion users. Using this social network, businesses can gain access virtually to all the solvent population of China. Companies from outside of China can create their official corporative accounts in WeChat.
An official account is the first step for a company towards the Chinese audience. It provides the company with a platform to provide information about its products and services. Official accounts are a good solution for companies with retail outlets that can post information about their offers and location. Also, WeChat’s newest tool for creating mini-apps is available to companies outside of China. Based on WeChat, these apps can be launched both on Android and iOS without downloading. This is a great solution for booking services or services with a wide range of online tools.
Alipay has an audience of 600 million users, and it provides a well-developed set of tools for placing local companies using the StoreFront function. It also has a convenient system of location-based notifications about offers from companies near the tourist.
Alipay and WeChat Pay started making their way in Russia by entering “key points” – the places that had been the most popular destinations for Chinese tourists long before Chinese payment systems arrived in the Russian market. That’s why the benefits weren’t always obvious for the companies which were the first ones to start accepting payments via these systems. It seems that Alipay and WeChat Pay would often simply cannibalise the traffic of traditional payment methods which made the integration of these payment systems not a very profitable solution.
Neither local companies nor the payment systems themselves were satisfied with the state of affairs at that time, therefore, a more active integration of Chinese marketing tools started on markets outside of China. On the scale of cities and countries in Europe, WeChat’s mini-apps are successfully integrated to merge the infrastructure of tourism, transportation and trade into a tool that is understandable and convenient for Chinese tourists.
A new infrastructure is being built in the most popular tourist destinations of the USA and Europe with the help of Alipay and WeChat. The largest tourist ecosystems based on WeChat’s mini-apps already have over 30,000 users monthly with an audience growth of 20% per month. Such ecosystems consist of the biggest international brands, retailers, touristic and governmental services, and local sights.
Nowadays a Chinese tourist can buy a subway ticket in Paris, or use the railway system in Italy without leaving the WeChat app. They can get the information about the urban infrastructure of New York or Venice, buy a ticket to Disneyland in Paris or the Burj Khalifa observation deck. It attracts a huge number of Chinese tourists who used to be scared to travel to those places on their own. Such solutions help them feel free during their trip without missing interesting places and offers.
Western companies are also gradually starting to use these wide-ranging marketing opportunities. They are starting to create their official accounts on WeChat and StoreFronts on Alipay, they are getting more used to the fact that the information to attract foreign clients should be presented not only in English but also in Chinese.
Yandex.Checkout, in turn, has seen a growth in average check of payments made by Chinese citizens over the last year. More segments of Russian economics are being integrated into providing services for Chinese customers: airports, hotels, tourist agencies, online stores and retail outlets. Payment methods are integrated both online and offline: on merchant’s website or using terminals at checkouts of commercial facilities.
By Ilia Sokolov, head of Asian business development at Yandex.Checkout