Social messaging was perceived as incompatible to its positioning as a professional financial services application.Īlipay provoked a public backlash when it began trials of Quanzi, a new social networking feature, in November last year. They are aware of Alipay’s integration with a variety of financial services – from insurance to credit rating.Īlipay attracted criticisms when it attempted to expand into social networking. Chinese consumers do not dispute this claim. In contrast, Alipay sells itself as a professional payment solution.
With this positioning, WeChat Pay captured a large share of the payment market in China. This contrasts with Alipay’s positioning as a money manager. WeChat has positioned its wallet as one of “loose change” (literally so in Chinese). It had US$170 billion of assets in Q1 2017, making it the world’s biggest money market fund. Yu’ebao is still most Chinese consumers’ go-to savings platform for now. But it is less impressive when it comes to non-payment financial services. WeChat does have a “wealth” function for users to store their savings. As a result, Chinese consumers tend to see WeChat Pay as an application for transactions rather than for money saving. More than five million WeChat users participated in the scheme during the 2014 Lunar New Year. WeChat Pay’s other payment functions became increasingly popular following the success of its “red packet” scheme. This scheme enabled WeChat users to send money to family and friends as gifts, particularly during Lunar New Year. WeChat Pay gained significant traction after WeChat launched its “red packet” scheme in 2014. Yu’ebao provides an annualised seven-day yield of 3.96% to investors, compared to banks’ annual interest rate of 0.35%. Why is this so?Īlipay encourages saving money WeChat Pay recommends spending themĬhinese consumers are turning to Alipay’s monetary fund Yu’ebao – rather than Chinese banks – for money saving purposes because it offers higher interest rates. This saying has been trending in the Chinese internet community – “WeChat Pay for pennies, Alipay for big bucks” (大钱支付宝,小钱微信支付). The two mobile payment giants have been racing each other for payment dominance. In the first quarter of 2017, Alipay held 54% share in China’s third-party mobile payment market share. Today, WeChat holds more than 40% of mobile payment share in China. By launching the wallet function, WeChat entered the e-payment scene. Many have been comparing WeChat with Alipay ever since Tencent launched WeChat Pay four years ago. While they have different positioning, WeChat is gradually catching up with Alipay.
WeChat focused on messaging and grew its payment and transfer services. Alipay focused on payments and expanded into financial services. Tencent’s WeChat and Alibaba’s Alipay started off as two products. As WeChat Pay and Alipay expand outside China, they must ensure their growth strategies do not threaten their public image.