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Targeting Chinese Shoppers (Part 2 of 4)

The first question to ask: 'How can I get paid?"

As brands look to tap China’s enormous consumer market, they are faced with many daunting questions:

  • How do I build my brand?

  • How do I reach my target audience?

  • What about logistics?

  • Do I need a Chinese website?

  • Do I need a Chinese partner

  • . . . and the list goes on.

However, answering all of the questions regarding logistics, building a brand, etc. are useless if your Chinese shoppers have difficulty making a purchase. Before spending money to attract Chinese consumers, make sure you know the answer to:

"How will I get paid and make money?

For eCommerce merchants, the traditional thought process when it comes to payment processing has been “Visa, MasterCard, Amex, and Discover . . . and a PayPal button.” Up until a few years ago this was sufficient, but not today.

If you want to be able to capture the majority of Chinese eCommerce consumers directly, integrating one or more additional payment methods is now essential. There are three of them, and I have coarsely compared them to their closest domestic US counterparts:


From within China, UnionPay is the dominant card network across all Chinese credit and debit cards. Over the past decade, international card networks including Visa and MasterCard have attempted to penetrate the market with limited success. Relegated to credit cards only (all debit cards are only processed by China UnionPay), Visa and MasterCard along with others were only able to participate through dual branded credit cards. However, after years of issuing dual branded cards (ex. a card with both a UnionPay and a Visa logo), to this day they only cover less than 1/5th of total credit cards issued in China. The issuing of dual branded cards has since been stopped as, starting June 1, 2015, these global networks are now allowed to apply for a license to clear payments in China and issue their own cards. However, this is just the first step in what will likely be a very long and drawn out process. Bottom line, when it comes to card networks, China UnionPay is still the only game in town.


Beyond China UnionPay, there are two dominant companies in the digital payments space that boast users in the hundreds of millions, Alibaba and Tencent. Part of the big three BAT (Baidu, Alibaba, Tencent), these tech giants have seized upon the lack of innovation from China UnionPay to jump into the payments space.

Alibaba, with its two large marketplaces and, was first into this market with AliPay. Initially used as convenient escrow account to facilitate payments on its Taobao and Tmall marketplaces (rather than walking down to the local convenience store to make a payment in cash), AliPay has since expanded its service far beyond these confines to include paying for daily essentials such as utilities, phone bills, as well as numerous other activities like buying movie tickets and dinner. For users with deposits within the AliPay system, AliPay also offers interest bearing accounts that provide a higher return than most checking or savings accounts in China. Boasting a user base of over 300 million registered accounts[1], AliPay currently accounts for roughly half of online payments in China.[2]

While Tencent was late to the payments space in China, the success of its WeChat messaging app has propelled the adoption of its payment platform, Wechat Pay. Primarily used on mobile devices, Tencent and Wechat Pay has gained in market share for transactions not just involving purchases online, but peer-to-peer money transfers. During the Chinese Spring festival, its “hong bao” or red envelope campaign was hugely successful, seeing over 1 Billion transaction over the 2015 Chinese New Year.[3] With an easy UI including barcode scanning that assists with logging into an eCommerce store, for many smartphone users in China, WePay has surpassed AliPay in terms of innovation and ease of use. WeChat’s large base of installed applications means it will be a force to be reckoned with in the decade to come.

What this means for international merchants:

If you want Chinese consumers, you need a Chinese payment solution.

While dual branded cards can be used internationally over the Visa or MasterCard networks, and other workarounds exist, they come with higher processing fees not only for the merchant, but the customer as well.

For eCommerce merchants the question is, why make your shoppers find a workaround? UnionPay, AliPay, Wechat Pay integrations exist.

Stand apart from your competition and show your Chinese shoppers you value their business by letting them pay you easily and efficiently.




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