Alipay: "enclosure" is still the main melody

Source: Southern Metropolis Daily

Alipay's goal is to "all-round and whole-group ".

According to public media reports, as of August 28, 2008, the number of registered users of Alipay reached 0.1 billion, and by the end of June, the number of Chinese netizens reached 0.253 billion, that is, nearly 40% of domestic netizens were Alipay users. Even more intriguing is that the number of Taobao users is only 80 million. Five years ago, Alipay was originally a function and Department of Taobao. It is no wonder that the observer was delighted to write a comment: Alipay completed its "adult ceremony" after "Shan Fei ".

However, it is worth noting that even the largest third-party payment company in China has not provided a profit schedule.

Since its launch, Alipay has been pursuing Jack Ma's overall strategy of "making C2C transactions bigger and stronger first. "For the 2009 plan, our focus is on continuing to expand the network transaction scale ." Qiu Changheng, vice president of Alipay, told this reporter that he did not seem to be too concerned about Alipay's profitability.

Happy childhood

When China's online shopping market is still in its infancy, the credit problem not only plagued buyers and sellers, but also plagued Taobao, which is a C2C seller platform. Alipay solves this problem for Taobao.

Unlike PayPal, which is backed by mature western credit systems, Alipay does not directly subscribe to the seller, but the buyer first transfers the money to Alipay, which notifies the seller to deliver the goods, when the buyer confirms the receipt after receiving the goods, Alipay will pay the seller. Jack Ma is confident that Taobao's transactions will be active only when the buyer gets better protection, the plates will be large enough, and he will use this idea to persuade many sellers. On the other hand, Alipay tries to establish a credit evaluation system based on the transaction information of buyers and sellers for the imperfect credit system.

It can be said that Alipay plays the role of "UnionPay" on the internet. In addition to providing guarantee for payment, the "intermediary" also provides the "transfer payment" function between banks for buyers and sellers. The latter, naturally, is indispensable for the participation of banks.

Banks also have their own considerations to connect their systems with Alipay, which not only increases business volume, but also significantly reduces the cost of counter resources.

Alipay's guarantee function makes up for the transaction risk in the background of lack of credit, which allowed Taobao to develop rapidly in the following time, increase the domestic online shopping market from 2003 RMB in 3.9 billion to 2005 RMB in 19.3 billion. EBay, the industry leader, can only be the second.

At the end of 2004, Alipay was officially removed from Taobao and an independent Alipay Company was established. Alipay also looks at more e-commerce websites.

Major banks are also focusing on the cake in the online banking market. Nearly two years after its establishment, Alipay announced that it had completely suspended its Alipay account remittance business at offline bank counters, opening the curtain of its cooperation with the bank's online banking business. At this stage, under the same vision of expanding the market scale, Alipay's free policy still received a response from banks.

Growing troubles

It was during this period that independent third-party payment companies, such as Caifu Tong, Lakara, and quickmoney, had been killed from half the way and ignited the smoke in the third-party payment market.

The addition of competitors means that the industry will enter an impulsive and irrational fierce fight. However, due to the delay in introducing the "payment and clearing organization management measures", all third-party payment enterprises are very cautious about the charges, lest they lose money.

Since January 1, April 2007, Alipay charges fees for contracted merchants and non-contracted merchants at different rates. "Whoever makes money will pay for it ." Qiu Changheng said. Since then, other third-party internet payment enterprises in China have started to charge fees.

The advent of the charging age is accompanied by the era of payment to banks. "We have in-depth cooperation with banks, including some resource exchanges between the two sides. With the in-depth cooperation, the benefits of everyone are not just a simple rate issue. The Development of Alipay has brought about the number of new users to the bank, making a big pie together ." Qiu Changheng said in an interview that although the common vision has not changed, the gateway rate paid by Alipay to banks has become the main business expense.

However, for the moment, the charges for merchants cannot make up for these expenses. Alibaba consulting online payment analyst Jiang Li Xin told reporters that the current profit of industry operators is the main gateway revenue, which accounts for more than 70%.

Qiu Changheng also said that Alipay has invested hundreds of millions every year in expanding the number of online transactions. However, the amount of fees charged by merchants is far behind the investment. However, unlike other independent third-party platforms, Alipay has always pursued the overall strategy of Alibaba and its e-commerce market. As a result, Alipay will continue to drive the market.

Main melody of "enclosure"

In terms of payment methods, Alipay began to extend to other payment channels. At the beginning of its establishment, it used the Alipay transfer and remittance channel at the ground counter and was retrieved again. In addition to China's postal network e product, Alipay also cooperates with offline terminal vendors such as La Karla.

Zhang Yanping, a consulting analyst at iResearch, believes that after fierce competition for Internet users, payment companies have targeted a larger market. The penetration rate of Internet users is only 2007 in 16%, and the penetration rate of broadband Internet users is only 12%.

"There must be a transitional online shopping consumption behavior. Consumers must try to pay through the ground channels and then gradually transfer to online payment ." Qiu Changheng said that Alipay also cooperates directly with convenience store channels to develop ground payment channels, aiming to cultivate over non-internet payment habits.

The advantages of individual user scale are directly reflected in the value of individual users, especially in the livelihood field. To this end, third-party payment companies are fiercely competing in the fields of water, electricity, coal, communication fee, telecommunication fee, transportation fee, transportation fee, road maintenance fee, tuition fee, and traffic fines.

Alipay is also advancing into this market. In Shaoguan, Guangdong, people in the city who participate in social security can use Alipay to pay for medical insurance; in Zhejiang, many cities can use Alipay to pay for road maintenance.

How far is profit?

"Value-added services must be an important trend in the expansion of third-party payment profits. Relying on simple and homogeneous gateway payment alone, it is difficult for so many payment platforms to obtain sufficient living space ." Jiang Li Xin told reporters. From another perspective, there are still many new markets to be explored for third-party payment.

Payment Scheme customization has become one of Alipay's breakthroughs. "There are several complex distribution relationships between airlines and ticket agents. The same ticket comes from different regions and different ticket generations with different rates. There is also an exchange platform between ticket generations. After in-depth understanding, we have independently developed products for the air ticket industry ." Said Dong Xinping, Alipay marketing director.

In value-added service content, payment systems are customized, and revenue share systems in some industries are often complicated. For example, in the B2B field of airline tickets, third-party payments are given opportunities through innovation and marketing. According to statistics by iResearch, the airline ticket B2B transaction volume increased by 24.07 billion yuan last year, reaching 30 billion yuan, which is the highest in all sub-sectors. At the same time, it is estimated that the online payment transaction volume of airline tickets will exceed 2012 yuan in 200 billion.

No matter in C2C, B2C, or B2B, and then to the convenience of G2C, Alipay's tentacles are constantly expanding to achieve the goal of "large enough" user scale and application scope. Alipay's goal is to "all-round and whole-group ". "The Internet is changing, and Alipay may be profitable in two or three years. "Said Qiu Changheng.