FIS Modern Banking Platform
Advance your bank with a modern core platform.
China leads the world with alternative payments at the heart of eCommerceMerchants that offer a wide range of payment options best positioned for success in China’s increasingly fragmented payments landscape
January 25, 2018
January 25, 2017 – Beijing – China is at the forefront of a global trend toward increasing complexity in the online payments market; this is according to new report from leading payments company Worldpay, Inc. which has found that consumers across China increasingly prefer to pay online via e-wallets, credit cards and bank transfer.
In its annual Global Payments Report, Worldpay found that China’s eCommerce market is set to grow by 11% to US$1.55tn by 2021, reinforcing its position as the largest eCommerce market in the world. Alternative payment methods are cementing their place at the heart of online shopping in China – echoing a global trend towards fragmentation in online payments, as options like mobile wallets, pre-paid cards and bank transfers are set to steal market share from more traditional payment methods like credit and debit cards over the next five years.
The Report found that:
- Most consumers prefer to pay with an e-wallet such as Alipay or WeChat Pay. E-wallets now account for 62% market share in China.
- What follows in popularity, are credit cards (10%), bank transfers (8%), and cash on delivery (8%) each in 2017.
- Bank transfers are set to overtake credit cards as the second most popular payment method in China, accounting for 14.2% of all eCommerce market share by 2021.
- Credit cards are set to lose share in China in the next five years, shifting from 9.6% to 7.7%.
- Conversely, debit cards are set to increase from 4.5% to 7.1%.
Globally, eCommerce is set to grow at an average of 11% over the next five years, and the three fastest-growing eCommerce markets are Colombia, Argentina and Nigeria. These “CAN countries” are forecast to lead the world with annual rises in eCommerce of 31%, 30% and 24% respectively.
The report also found that the Latin American eCommerce market* is set to grow at a CAGR of 19% over the next five years, rising from US$59bn today to be worth $118bn in 2021 – the biggest rise of any region1. Argentina is set to become the fastest growing eCommerce market in Latin America, poised to be on par with
Brazil as early as 2024. Credit cards remain the most popular payment method for consumers in 2017, but e-wallets are expected to rise substantially over the next five years, increasing by 18% in Argentina, and more than doubling in Brazil, as more consumers shop on their mobile phone.
Conversely, the EMEA region is set to grow at a rate of 10% in the next five years, and expected to be worth $780bn in 2021 – up from $529bn in 2017. High growth eCommerce markets in EMEA include the UK, which is expected to grow by 9.7% to be worth US$267.7bn in 2021, and Turkey, which is set to grow by 13% CAGR rate to reach US$17bn in 2021.
Meanwhile in South East Asia, Chinese merchants should consider expansion into South Korea and Indonesia. South Korea’s eCommerce market is set to grow by 19% CAGR rate to reach US$81bn in 2021, whilst Indonesia’s eCommerce market is expected to grow by 23% CAGR rate to be worth US$25bn during the same period.
Tang Kok San, Country Manager for China at Worldpay, commented: “Once again, China is at the forefront of emerging global trends, as consumers here lead the charge in demanding more opportunities to use different payment methods when shopping online. While there are significant variations in how consumers prefer to pay, a constant is that they are shifting away from more traditional options like credit and debit cards, and instead choosing e-wallets and bank transfers.”
He continued, “In order to keep up with changing market conditions and respond to varying consumer payment preferences from market to market, online merchants should support a wide range of payment options. By giving online shoppers the chance to pay via their favourite method, businesses will create a consistent, streamlined checkout experience which is capable of converting browsers into buyers and fostering long-term loyalty amongst local and cross-border shoppers.”
Worldpay has published a list of guidelines for merchants looking to capitalise on the eCommerce and mCommerce opportunity in China and across the Asia Pacific region:
- One-click ordering: Consumers are more likely to shop more often with companies that save their payment details for one-click ordering. Merchants should provide one-click ordering to make online checkout as seamless as possible – especially via mobile apps.
- Consider the most popular payments methods in each territory, and prioritise those that complement your business model – there is no one-size-fits-all in the Asia-Pacific region so you will need to understand the best options for your company.
- Cross-border trade: Merchants should ensure that they have local acquiring capabilities wherever they have a legal entity; offer a wide range of currencies at checkout; and consider local language customer support in their customers’ time zone to deliver a great customer experience.
About the 2017 Global Payments Report
This report was compiled using a mixture of primary and secondary data sources. Primary refers to our own surveys and commissioned research; whereas secondary refers to authoritative third-party vendor data, and other publicly available data. The report also draws upon Worldpay’s decades of experience in providing global eCommerce solutions. The eCommerce projected growth figures contained in this report were sourced from GlobalData’s eCommerce Analytics database and relate to the eCommerce industry as a whole, not Worldpay’s business. GlobalData collected this data using consumer surveys, B2B surveys and desk research. Any indicative predictions based on the data we have used should be treated as such.
About Worldpay, Inc
Worldpay, Inc. (NYSE: WP; LSE: WPY) is a leading payments provider with unique capability to power global integrated omni-commerce, any payment, anywhere. With industry-leading scale and an unmatched integrated technology platform, Worldpay offers clients a comprehensive suite of products and services globally, delivered through a single provider.
Annually, Worldpay processes over 40 billion transactions through more than 300 payment types across 146 countries and 126 currencies. The company’s growth strategy includes expanding into high-growth markets, verticals and customer segments, including global eCommerce, Integrated Payments and B2B
Worldpay, Inc. was formed in 2018 through the combination of the No. 1 merchant acquirers in the U.S. and the U.K., Vantiv, Inc. and Worldpay Group plc. Worldpay, Inc. trades on the NYSE as “WP” and the London Stock Exchange as “WPY.”
For more information, visit http://www.worldpay.com/global/about/regional-expertise/asia-pacific
The information is provided on an "AS IS" basis for information purposes only and Worldpay makes no warranties of any kind including in relation to the content or suitability.
Worldpay (UK) Limited (Company No. 07316500 / FCA No. 530923), Worldpay Limited (Company No. 03424752 / FCA No. 504504), Worldpay AP Limited (Company No. 5593466 / FCA No. 502597). Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AF and authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Worldpay (UK) Limited is authorised and regulated by the Financial Conduct Authority for consumer credit activities.
1GlobalData, refers to Argentina, Brazil, Colombia, and Mexico.