Chinese Love Money, Just Not The Paper Kind
Dear Destination Leaders,
Those of you who’ve visited China in the past 12 months will have noticed an extraordinary thing going on with people’s wallets… there were none. In just 3 years China has all but completely transitioned into a cashless society, and it’s bloody awesome (that’s Australian for great)!
China’s mobile payments totaled 81 trillion yuan ($12.77 trillion) in just the first 10 months of 2017, the world’s largest volume, as reported by the Xinhua News Agency. You remember that feeling of getting out of an uber the first time? Yep, it’s like that all the time.
And it’s been driven by two mega tech giants: Alipay, Alibaba’s mobile payment service, led the market with a 53.7% share, followed by Tencent Finance, with a 39.1% share. It’s safe to say they have the market covered.
So for you, it’s all about shopping
With Alipay and WeChat now accessible in over 50 new international markets, Chinese tourists can skip the hassle of exchanging foreign currencies and carrying cash around. Research shows only a little over 10% of Chinese outbound tourists prefer to pay with cash or credit cards.
Last year we saw 135 million trips taken abroad, however, given their payment preferences, shopping has been a stumbling block. But now we’re seeing a big shift. Since Alipay broke into the market they now have payment agreements with some 170,000 North America retail locations.
Since the lunar holiday started just days ago, it’s too early to know how much is being spent using the app, but if last year is any indication, Chinese visitors will spend an average $2,733 each in the U.S alone.
My guess is that by offering the cashless payment option retailers can expect to see an increase in sales of between 3-5%. There’s just something about not holding cash that makes it so easy to spend, not to mention the convenience of always having it.
Happy shopping everyone.