Why the Chinese Market May Prove Rotten for Apple Pay
It’s hard to believe that Apple Pay’s lifetime can only be measured in months, but in that short time, it’s managed to come a long way and fundamentally shake up the mobile payments market as we know it.
But one place that isn’t quite so shaken up by Apple Pay’s arrival is the Chinese mobile payment market, and new reports suggest that Apple Pay’s entry into the Chinese market may be, at best, an uphill battle.
Revealed by a report from International Data Corp’s Asia/Pacific consumer mobility and social consumer research team, several points became quite clear, and none of these points were positive signs for Apple Pay’s attempt to control the vast Chinese mobile payments market.
After several years of availability, China is still hands-down Android territory. It’s not even close. Though there are reports that owning an Apple device is considered something of a status symbol, the overall market is much smaller than Android’s, meaning that the field can only go so far for Apple Pay.
A limited market is just the start of Apple’s problems; even those who would go with Apple devices may not be interested in Apple Pay, as several services are already in place.
Alipay and WeChat—two of the biggest forces in the Chinese app market—are both offering mobile payment services, and they’re just two among several.
There have been some reports noting that mobile Internet firms are actually getting more traction in the Chinese mobile payment market than banks are, and that’s a point that should stagger the imagination.
What’s more, Chinese mobile wallet systems have been around longer, so they offer more services than the current breed, as well as access to more stores.
So that’s the state of the Chinese market, and sums up nicely the kind of wasp’s nest that Apple may be walking into: a market where its platform is limited in scope, where its services are already being done and then some and where its reach isn’t nearly as extensive than of said competitors. That’s not a recipe for success, but one thing Apple is well known for, and not without reason, is its innovative prowess.
It might be able to pull something out of its collective hat, so to speak, and bring out some powerful new tools to make it a real competitor in the Chinese market. Further, consider that, if Apple products are status symbols, then perhaps the wealthier market would be buying the same. If these well-heeled spenders get in on Apple Pay, it could be that Apple will make up the difference in volume per customer. Naturally, only time will tell if this proves to be the case, but it’s certainly possible.
The mobile payments market is a strange animal, and will likely continue to generate unexpected outcomes for some time to come. But one thing is clear immediately: Apple Pay as we know it today will have a real fight on its hands to make headway in the Chinese market.