Apple Pay’s largest promotional campaign in China aims to capture market share
A year after launch in China, Apple Pay has yet to receive anything more than a lukewarm response from Chinese consumers.
The Chinese mobile payment market is the largest and the fastest growing mobile payment market in the world
, but it is a difficult market to compete in for new entrants, as market leaders Alipay and WeChat Pay have dominated the market. Recent data from March this year showed
that Alipay had a market share of 54.7%, while Tenpay (including both WeChat Pay and QQ Wallet) came in second with a market share of 37%. This leaves less than 10% of market share for other players, including Apple Pay.
In response, Apple Pay has chosen to launch its largest promotional campaign yet this summer. The campaign
runs from 18 to 24 July, allowing users to enjoy discounts of up to 50% and accumulate greater bank credit card points when they pay for purchases via Apple Pay. Retail partners include 7-Eleven
, Costa Coffee
, Pizza Hut
, and many more.
Each promotion differs depending on the retail partner involved. At 7-Eleven, consumers stand to enjoy a 50% discount up to 10 Renminbi (S$2). Alternatively, when consumers pay via Apple Pay in Starbucks, they stand to enjoy a 15 Renminbi (S$3) discount after a minimum spending of 60 Renminbi (S$12). However, most retail partners have placed a limit on the number of redemptions. For instance, 7-Eleven placed a limit of 1.47 million redemptions for the entire event, while Starbucks allows only 47,619 redemptions daily on a first-come-first-serve basis.
Most of the offline retail discounts offered for this campaign are only applicable to consumers in China’s first-tier cities. However, consumers who are not residing in first-tier cities can also save on purchases with discounts offered by online retailers. Participating online retailers cover a wide range of industries, such as companies offering bike-sharing services (Mobike
), online ticketing companies (Gewara
), e-commerce retailers (Kaola
), and online grocery store BenLai
Consumers can also accumulate greater bank credit card points as long as they pay for their purchases via Apple Pay during this campaign period at selected retailers. Participating banks include the 5 state-owned banks, joint-stock banks, as well as several local banks. UnionPay debit and credit cardholders of China Merchants Bank
, SPD Bank
, and Bank of China can accumulate 5x the usual credit card points
, while cardholders of Agricultural Bank of China
, CEB Bank
, China Construction Bank
, Industrial Bank
, and Shanghai Bank
can accumulate 50x their usual credit card points.
Similar to the retail companies, most of the banks have implemented a maximum number of points that cardholders can accumulate over this period. For instance, Agricultural Bank of China has placed an upper limit of 10,000 points per person, while China Merchants Bank has an upper limit of 1,000 points per person during this campaign.
One of the reasons why Apple Pay has not been as well received amongst mainland Chinese consumers is because the NFC technology used by Apple Pay is incompatible with Chinese users’ consumer habits. While the NFC technology is more convenient than paying via QR code, Chinese consumers have already grown accustomed to the latter, especially since Alipay and WeChat Pay both use QR codes for offline payments. In addition, retailers will need to install POS terminals that recognize this NFC technology in order for Apple Pay to be adopted in their stores, and train their employees to learn how to settle payments via Apple Pay. However, given the relatively low adoption of Apple Pay amongst consumers, smaller retailers have not made the necessary steps to accept Apple Pay. As a result, China UnionPay, one of Apple Pay’s partner, has introduced its QR payment solution
recently to combat this problem. This campaign is a small step in changing the habit of both consumers and retailers in China – on one hand, it encourages consumers to familiarize themselves with Apple Pay, and on the other, it forces retailers to learn how to accept Apple Pay.
About FOMO Pay Pte. Ltd
FOMO Pay is the first authorized WeChat Pay & Baidu Wallet partner in Southeast Asia, and was selected as one of the TOP 100 Asian Companies by E27, TOP 100 Startups by Red Herring Asia, and Top 8 by DBS’ FinTech Accelerator Program. FOMO Pay provides a one-stop solution for local merchants by facilitating payment collection from the China market, including Chinese tourists. This comprises of online/offline Chinese payment modes, such as WeChat Pay, Alipay and Union Pay. FOMO Pay’s business solution serves clients from a wide range of industries, including the telecom, publishing, tourism and hospitality, F&B, education and retail industries.