imagesColumn

<Report from overseas office> [China] Accelerating Digital Society in China, the World's Number One Mobile Payment Country

The world's largest mobile payment country

images

          * Excerpt from ii Media Research (艾媒諮詢) Unit: trillion yen

On the other hand, in the Japanese market, the size of the Japanese mobile payment market was 1,256.648 trillion yen in fiscal 2017, and is expected to expand to 4 trillion yen in fiscal 2023 (according to Yano Research Institute, Inc.), but this is an overwhelmingly small market compared to China.
In China, the use of mobile payment is rapidly expanding at a rate that exceeds that of developed countries such as Japan, and it has deeply penetrated every aspect of the social economy, becoming an indispensable infrastructure for daily life.

Reason 1: Smartphones are cheaper than PCs

In China, the spread of the Internet using personal computers has not been as advanced as in developed countries, and this is the reason why smartphones became popular before personal computers became popular.
This is because a computer usually costs 4,000 to 6,000 yuan, but a smartphone (made in China) can be purchased for only 2,000 yuan, making it possible for many Chinese to use it.

Reason 2: Cash was not trusted.

In China, both Alipay, provided by Alibaba, the largest e-commerce company, and WeChatPay, provided by Tencent, are leading the way in mobile payments and are also useful as a means of sending money between individuals.
As long as the fee-free limit is not exceeded, there is no fee for person-to-person remittance and money can be sent at any time. In China, mobile money transfer can be used to split the cost of a meal, or to give a New Year's gift or congratulatory gift.

Reason 3: Introducing mobile payment (QR code) is easy for businesses.

IC payment systems such as Suica, which are used by many people in Japan, are said to have high barriers to entry for individual stores due to the introduction of terminals and screening.
On the other hand, businesses need only a smartphone and a piece of paper with a QR code printed on it to introduce QR code payment, which makes it easy for businesses to introduce it.

Thus, with smartphones that everyone can now carry around, cashless transactions with QR codes are taking place everywhere from major fast food restaurants to small street vendors in the city. All of this is happening in China right now. China is now a "digital superpower," and there are many Japanese who actually go to China and are surprised by its advanced nature.

Acceleration of the digital society through the spread of mobile payments

In China today, payment by smartphone is so widespread that there is no need to carry cash at all.
Cashless payment is possible at almost all stores. If you have an app called "wechat" or "Alipay" on your smartphone, you can use it to pay your bills at supermarkets, department stores, hotels, restaurants, cabs, bike rentals, utility bills, rent, and many other places in your life. If you have a wechat or Alipay app on your smartphone, you can send money or make payments by simply scanning a QR code. This is true even for small stalls, such as when you just want to buy a bottle of water.

With the emergence of mobile payment services, going out without cash has become an everyday thing for Chinese and expatriates alike. I no longer carry a wallet with me when I go out.
Lastly, I would like to introduce how I usually use mobile payment services.

- Buy Coffee -

If you've ever bought coffee at Starbucks in Japan, you'll know that there are always four to five staff members at the store, including the staff who check the bill and the staff who make the coffee, and it may take 10 to 15 minutes to buy coffee when the store is crowded.
At luckin coffee, the store I use is always staffed by two people, and there are no customers waiting for their coffee to be ready. There are no customers waiting for their coffee to be ready. The shop is run by two staff members, one who prepares the ordered items and the other who checks the order form and puts the finished items on the shelf. I am impressed with this very convenient and efficient system.

・luckin coffee (瑞幸珈琲)

images

5) Coffee redemption
You will receive a notification on the app when the product is ready, and you will receive the product by holding the QR code displayed on the app over the reader installed in the store by yourself.

We go to a restaurant near our office for lunch, and most of the restaurants use mobile phones to order and pay for the food at the same time. Most restaurants allow customers to order and pay at the same time using their mobile phones, so the hall staff at the restaurants only serve what the customers order.

The process from order to payment is as follows.

images

In Shanghai, where I am stationed, public transportation such as trains and buses, as well as cabs, are very cheap. In Shanghai, where I am stationed, public transportation such as trains and buses, as well as taxis are available at very low prices. However, cabs are often hard to catch on the street, so I usually use apps to arrange a cab.

How to arrange a cab.
1) Enter your current location and destination, and the approximate time and price will be displayed.
(2) After arranging a cab, you can see how long it will take the driver to get to your destination.
(3) After getting in, the driver will take you to your destination, and the mobile payment will be made automatically upon arrival.

The app also has a system that allows users to rate the cab driver's manners and other factors after getting off the vehicle, which helps to improve the driving manners of cab drivers.

In recent years, China, as a nation, has been actively engaged in digital transformation. The widespread adoption of mobile payments is an important part of the development of the digital society, and it is about to change society in a big way, bringing about major changes in the lifestyles of the Chinese people while helping to improve the convenience and efficiency of society as a whole.

Translated with AI Translator


  • Intage Inc

    Author profile
    Katsuhiko Saitou

    4 years in Shanghai, 40s, male researcher.
    He has worked on more than 1,000 projects in Japan and overseas (mainly in Asia).
    He has worked on more than 20 projects related to product launches in various fields.
    Conducted several workshops on physician and patient insight research, market forecast research, and positioning creation, both in Japan and overseas.

  • Intage Inc

    Editor profile
    INTAGE

    ***

Reproducing and quotation
  • The copyright of this report/column is held by Intage Inc. or the company to which the author belongs. Please confirm the following prohibitions and cautions, and specify the source when reproducing or quoting.
    Example:
    "Source: Intage's Research Report "(Report title) (issued on DD/MM/YYYY)"
    "Source: Global Market Surfer, article published on DD/MM/YYYY"
  • Prohibiton:
    • Modification of part or all of the contents
    • Sale or publication of part or all of the contents
    • Use that is offensive to public order and morals or that leads to illegal activities
    • Reprpducing or quotation for the purpose of advertising or sales promotion of companies, products, or services.
  • Other cautions:
    • We are not responsible for any trouble, loss or damage caused by the use of this report.
    • These terms of use do not restrict the use of quotations, etc., which are permitted under the Copyright Act.
  • If you have any questions about reprinting or quotation, please contact us from here